Prepare for the New Era of Tinkering

It is well documented that during times of entrenched inflation, like in the 1970s, we see folks "stretching out" every last ounce they can get from their household durables (also known as durable goods, items designed for long-term use within a household, typically lasting for three years or more). 

In other words, spending the money to replace these items, namely appliances like refrigerators, washing machines, dryers, ovens, dishwashers, and air conditioners is tough to come by as those funds are directed towards rising food, gas, shelter, and insurance costs instead. 

Thus, a dominant power tool brand like Stanley Black & Decker Inc., below on its monthly chart, becomes intriguing as a long-term play.

In particular, SWK is trading with a modest valuation. The stock has been deeply out of favor for a while now, but is sporting a bullish RSI divergence on the monthly chart relative to the recent low in price, as I have highlighted for you. The stock pays a reliable dividend north of 4%, to boot. 

Put another way, folks will readily buy a power tool from a dominant brand like SWK during times of inflation to tinker with their struggling appliances well before they shell out the big bucks for a new or refurbished model. 

As this decade rolls on I fully expect this thesis to play out and become more ubiquitous as struggling Americans adapt to sticky high prices, regardless of what politicians and central bankers are imploring them to believe about inflation.

As Honest Abe once said, you cannot fool all of the people, all of the time.