The Hershey Company (HSY): Protect Yourself With This Ultimate Inflation Hedge

Page 1 of 2

Ever since the financial crisis broke out in 2008, central banks have engaged in the practice of money printing in order to fuel the economy and avoid stagnation. One of the great concerns voiced by many is that this practice is bound to lead to a currency devaluation and rising inflation. Investors are terrified that their hard-earned cash will be simply inflated away by the government. Everyone wants to hedge their money one way or another.

The Hershey Company (NYSE:HSY)The common hedge

The majority of the investing population seeking a proper hedge for their cash has found it in the metal sector. The papers are full of praises for metals such as gold and silver. The most daring ones even propose copper or uranium, which are more volatile by nature, but provide a better hedge against devaluation. Indeed, precious metals have outperformed the general market by far. Gold, for instance, has outperformed the SPY 500 by 230% over the past decade. That is a phenomenal beat. But precious metals have become expensive and too correlated with the over-all performance of the stock market. I’m going to offer a cheaper, much tastier, inflation hedge.

The uncommon hedge

The tasty hedge that I’m about to suggest is loved by many. In fact, it’s so tasty that many of us are willing to pay a little extra premium with every year that passes. And this precisely, is the ultimate hedge, as well as edge, of this commodity. The commodity I’m writing about is chocolate.

Laws of demand and supply

What’s unique about chocolate, compared to other manufactured foods, is that its key ingredient – cocoa is concentrated in one, tiny politically volatile country. This country is the Ivory Coast which controls 40% of the world’s cocoa bean supply. This fact alone assures that supply will always be a little tricky. On the demand front, Asian counties have just barely begun consuming the brown stuff. Now that annual income per head is starting to rise, many more are sure to get hooked to this sweet commodity. Tight supply and high demand assure that prices will be on a continuous rise. But these facts alone do not imply that chocolate is a proper hedge against monetary expansion.

Who benefits from this trend

The Candyblog displayed a very interesting graph of the price of candy over the last century. Take a look at the graph here. The graph tells us the whole story. It visualizes the size of bar (green line), price of a bar (orange line) and price per ounce (brown line) over the last 100 years, for a The Hershey Company (NYSE:HSY) chocolate bar.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

The 10 Biggest Tax Havens in the World to Stash Your Money

The 15 Most Murderous Countries in the World

10 Largest Colleges in the World: Bigger Isn’t Always Better

Comedians in Cars Getting Coffee: The 6 Comedians Seinfeld Needs to Interview

Easy Money: The 10 Most Successful Investors in the World Today

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!