Outgrow the Money Supply
Alan Wu@alanwu
+2.5%
since Oct 10
The idea
I believe cash loses ground to the growing money supply, so I want businesses whose revenues rise automatically as more dollars circulate. Most of this basket sits in payment networks, essential data and software, and hard-to-copy infrastructure like railroads and waste hauling, with a slice in scarce land. About 17% is gold and bitcoin as insurance for stretches when money creation outruns stocks, and I keep a small cash reserve to add on declines. I'm holding for ten years or more and spreading across six groups rather than betting on single names.
What it owns
- These companies collect a small fee on every dollar spent, so their revenue grows as more dollars move through the economy. · Visa Inc.It collects a small fee on nearly every card payment, so its sales grow as more dollars move through the economy., Mastercard IncorporatedIt operates the other major card network and earns fees worldwide, so it grows with spending across currencies globally., American Express CompanyIt collects card fees, membership charges and lending income, so it gains as more money flows toward premium purchases.26%
- Customers depend on these products and accept price increases each year, so their sales keep pace with a growing money supply. · Microsoft CorporationBusinesses pay yearly for software and cloud services they cannot easily replace, and it can raise prices as dollars lose purchasing power., S&P Global Inc.It rates most of the world's bonds, and as the money supply grows more debt gets issued, driving higher fees., Moody's CorporationIt is one of two firms that rate credit, collecting fees as companies and governments borrow more of a growing money supply., MSCI Inc.It charges fund companies based on assets tracking its indexes, so its fees rise as more dollars flow into markets.21%
- Railroads and landfills cannot realistically be rebuilt by competitors, which lets them raise prices along with inflation and beyond. · Union Pacific CorporationIts tracks across the western United States cannot realistically be rebuilt, letting it raise shipping prices at or above inflation annually., Canadian Pacific Kansas City LimitedIt is the only railroad linking Canada, the United States and Mexico, so it earns on cross-border trade as prices and volumes grow., Waste Management, Inc.It owns landfills that are nearly impossible to permit today, which lets it raise prices annually faster than inflation., Republic Services, Inc.It is the second major landfill owner with hard-to-copy sites, which lets it pass rising costs to customers and raise prices ahead of inflation.17%
- Gold and bitcoin cannot be printed, and their value tends to rise when money creation accelerates. · iShares Gold TrustIt holds physical gold, which tends to preserve value when money creation outpaces other investments., BitcoinIts supply is capped at a fixed amount, making it a direct hedge against unlimited dollar creation.16%
- Nobody can create more land, so its value and rents tend to rise as the money supply grows. · Prologis, Inc.It owns warehouses on scarce urban land, and rents on limited space tend to rise as more dollars chase them., Texas Pacific Land CorporationIt owns a large stretch of the Permian Basin and collects royalties and water fees, so its income tracks oil and land values in dollars.9%
- Large, established businesses grow with the overall economy and help keep the take stable over a long stretch. · Costco Wholesale CorporationIt earns most profit from membership fees and can raise them as members renew, so its sales rise with economy-wide prices.5%
- Cash6%