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Stocks Soar as Inflation Decelerates

Stocks went up on Wednesday after inflation fell more than estimates last month.

Overall, S&P 500 climbed 2.1% to 4,210, while NASDAQ rose 2.9% to 12,855.

Meanwhile, Tractor Supply (TSCO) has increased profits every year since 2012.

Tweet of the Day

David Sharek is concerned about Tesla’s (TSLA) full self-driving:

I’ve seen a lot of videos where Self-Driving Teslas aren’t 100% in control of the situation. Alphabet’s Waymo may have a lead on this race. If Tesla can’t lock down FSD, it could be bad news for the stock, which is a top holding of ours.

Charts of the Day

We have two charts for today. First is TSCO’s one-year chart in 2012. This is what it looked like ten years ago. Second is TSCO’s current ten-year chart. Note that the company had a 2-for-1 stock split on September 27, 2013.

Founded in 1938, TSCO is the largest rural retail store chain in America that sells livestock feed, farm equipment, seasonal outdoor products and work clothing. Its customers typically have above average incomes, have a below average costs of living, and live in rural communities, including recreational farmers and ranchers.

TSCO is a buy because dogs need food. Other animals need food to, and people in rural areas go to TSCO to get it. That’s a big deal because it gives the company certainty during recessionary periods (like now). First, you can count on the company delivering revenue and profit growth. Second, TSCO can pass inflation costs onto customers and still deliver growth.

So here’s the stock basically at $45 ten years ago, and now it’s $192.

TSCO was added to the Conservative Growth Portfolio last qtr, as the stock is on the verge of reaching new All-Time highs. David Sharek’s Fair Value P/E is 26x profits, while the stock is currently selling on a P/E of 22x.

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