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Ebay Poised to Profit from Inflation 

I have never been prone to speculation.  Market timing and manager picking always seemed more like gambling than investing.  I am a student of Austrian Economics so of course I believe in the efficiency of markets...in the long term.  In the short term, the market is bipolar and illogical.  My investment strategy has been dollar cost average into low cost index funds thereby tempering the market's short term volatility.  That being said, I see an opportunity in converting the market's short term hysteria into long term profit.

As a disciple of Austrian Economics, I know that inflation is everywhere and always a monetary phenomenon.  The Fed's loose monetary policy necessitates inflation.  Inflation is great for debtors and the U.S. government is the biggest debtor in the history of the world.  It will be the government's best interest to debase the currency in order to make its debt more manageable.  Of course this is a disaster to holders of dollars.  As the reserve currency of the world, everyone owns dollars.  Everyone from foreign corporations to foreign governments to drug cartels, and everyone in between are sitting on piles of dollars.  There will be a mad panic by dollar holders to convert their devalued dollars into real assets. 

Dollar holders will repatriate dollars by buying American corporations and real estate, but they will also buy up every pair of designer jeans, every collectible, every gold bullion, and shiny trinket that is not nailed down.  Ebay (EBAY) is poised to capture a large percentage of these transactions.  Ebay is well known and considered reliable across the globe.  It is already used extensively in China and the rest of Asia. 

Ebay (EBAY) priced at $17.87 is up from its year low of $9.91 and down from its high of $31.37.  Inflation will increase the price of all assets including stocks and real estate (Hedge Inflation...Buy a House!), but the price of Ebay will outpace inflation.  This real growth will be a nice hedge for critical thinking investors with a good understanding of Austrian Economics.

Disclosure: Long EBAY