What if i told you that there's a stock class or category that's completely non-sensitive to inflation, and not only that that stock class is actually outperforming the market and getting better with elevated interest and inflation. Interesting right well check this out. Basically, when we talk about inflation and currently we're at a 40-year high with a seven percent inflation, we have only one savior, which is the federal reserve and that federal reserve has a few weapons in their arsenal and the main weapon or one of the main weapons Is raising the interest rates because that basically serves as a coolant that you pour over this hot boiling market, because when you raise interest rates, essentially what you do is you encourage people to save more money, obviously you're offering them more interest and basically decreasing the demand Of the market for goods and services, because at its core, inflation is just really a supply in demand kind of a mathematical equation. If you have high demand low supply, you create inflation, which is pretty much the description of the past two years.

But if you raise interest rates and you encourage people to save more then what happens is you have less competition in the market for goods and services, basically pushing down the price, at least in theory that is and for every single company in the world when they Hear that it's bad news, because elevated interest means increased cost of capital. Obviously, every company borrows money at some point, or at least almost every company, unless it's tesla or valentin, but when the elevated cost of capital basically push these companies to the brink. There's one more element that kind of serves even worse news, because also their valuations uh, which are derivatives of a dcf at this kind of cash flow valuation, are also pushed downwards, because uh weighted average cost of capital is pretty much one of the main cores of How dcf derives present value from future cash flows of these companies, so their valuations are going down, the market is cooling down and, more importantly, the cost of borrowing goes up. So a lot of companies are pretty much fearful of a high interest environment and you know rightfully so.

However, there's one type of company who is not only not fearful, it's actually very greedy. In fact, they're going like this. Oh yeah, elevated interest - and that is banks. Yes, banks are ecstatic about what's about to happen right now, because think about it.

This way how banks make their money they pay out to depositors very little and they charge on loans and investments a lot and that gap. If you raise interest rates, widens like crazy. Essentially, you create more revenue, more operating margin for these banks at zero percent investment and expense, literally just giving them money. When your interest rate goes up, the entire business model of the bank gets better.

I mean it's as simple as that: assuming the economy doesn't crash, of course, which i don't think it will. I don't think we're headed to a recession, because in the recessionary time i mean the banks will suffer. So that's my caveat to this theory, but assuming we're not going to recession - and this is something that's about to pull back the market which it seems to be doing, i think banks will have an amazing year now in this video i'll show you three banks in Which i'm extremely bullish on, including my target prices, and why i'm bullish i'll also show you two, which are a little bit of more conservative at where you're not going to get as much and they're already kind of priced in, but there's still solid investments for the Next year, in my opinion, these are going to go. These five banks are going to go on my 30 list of inflation proof companies.

If you want to get the full list which is not prepared by the way, we're still working towards the 30 companies. If you want to see the previous, i guess 12 or 13 companies we already have there, you can go to our patreon page and you know subscribe it's five bucks per month and you know you can get the list. However, if you're only wanting to subscribe for the list, uh send me a dm on social media. If you just want the list i'll, send you the list for free no problem, i don't want anybody subscribing to our patreon just to get the list.

You can get it for free. This is not a huge secret if you want to subscribe, for you know, channel support and the zoom calls and the community aspect of it. That's fine, but you know just send me a dm i'll, give it away for free, no problem. So, let's start with citigroup trading at 61.5 and i think the end of year target price, for this is going to be 77 bucks.

So i think there's about 25 of upside baked in into the stock, and i think by end of year it's going to be easy money and i'll show you why so there's two percent short interest in this company, which means not a lot of short interest. There's a nice little dividend yield of 3.25, that's a forward dividend yield and there's not so much going on. As far as the price movement of the stock over the past 12 months, the stock did 2.2. That's it so pretty much lying flat.

Now, if you look at the numbers, they're really impressive, so this is a company that's doing 29. As far as net income, it's a company, that's uh pe of six, so price to earnings of six, it's extremely low. It's about! You know like 40 under the sector, you'll see in the second wall, show you wells, fargo bank of america, jp morgan you'll, see that they're around 11 12 13.. So this is pretty much at half the price price to sales again at half the price 1.7.

That's it 1.7 and you see again when you see the other guys you'll see how expensive they are now. There's no reason for that cheapness, because this is a company. That's making about 15 billion in revenue per year like clockwork. Their margins are pretty nicely done at 29 percent and they really miss over the past four quarters three out of four quarters.

They actually beat revenue expectation and i think, with the interest rates they're gon na - do a really nice job of giving a nice little returns. I think 25 next year by end of 2022. Well, this is actually this year. It's gon na be a really nice return.

Now, let's talk about wells, fargo, so well. Fargo is a 208 billion market cap, massive company uh, also trading at 52, which i think is going to be massively underrated, as people figure out the interest rates game. I think this ends the year at 62. What about 19 end of year 2022? Nice little return in the year.

That's not gon na, be so easy to make money in only one percent short interest, which means smart money knows that this is not a company. You want to bet against dividend. Yield of 1.5 percent forward dividend yield not as good a city but a nice little dividend yield. Now.

This stock has not been battered, like citigroup, they actually did 20 or 21 over the past nine months. But as you're about to see right now, the ratios are still within the realm of reason. Now their p e is a little bit high at 11, which is right on par where most of these financial institutions are right. Now it's not as cheap as citigroup, but the price to sales is actually quite cheap, considering how good this company is with about 2.6 and the standard for this industry is you'll, see like bank of america and jp morgan you'll, see that this is about like three And a half or three and a half ish.

So this is a little bit underpriced. I would say: there's a little nice little 20 discount built in here and here on these two metrics, because this company is actually very nice: 26 net income, extremely nice revenue growth of 42 over the past 12 months, which means they're pretty much doubling the growth in The sector and they beat earnings quarters in a row and they'll, give you 20 billion of revenue per year like clockwork another great company to consider in this category. Now, let's talk about goldman sachs. Now, goldman sachs isn't exactly like a citigroup or even like a wells.

Fargo but they operate based on the same matrix, and i want to show you guys what we're talking about here. So this is a 115 billion dollar company now they're trading at what seems to be a massive discount three three five. I think this is like a 450 460 dollar stock, which means we have a nice little 38 in 2022 to be made, which is not going to be an easy year to make 38 percent in. So this is pretty interesting, only 1.2 short interest, which means not a lot of institutional money, is betting against this company forward dividend yield of 2.3 percent, which is higher than what we just saw a second ago with wells fargo, but not as high as the citigroup For example, uh over the past six months, the stock actually took a beating minus eight percent over the past six months.

So whoo. I don't know why, because net income margin is probably the best in the category 37, quite impressive, uh revenue, growth, 42, extremely impressive and the pe is still under six. So pe as good as we saw with citigroup and price to sales is still just two. So, within the realm of reason, now this is a company.

That's gon na you know beat earnings every quarter. Almost they beat three out of the last four and it's gon na give you anywhere from eight to ten billion a year in revenue like clockwork. Now i do want to show you jp morgan, the behemoth of the company 430 billion dollar market cap now only 0.5 short interest and a forward dividend yield of 2.8 exciting. Now, one month ago, the stock started plummeting and we saw a complete minus eight percent over the past few weeks.

So there's an opportunity there, even though the stock is still not cheap, cheap, but it's getting there so nice little company with 37 net income, not something you see every day: revenue growth of 28, again quite impressive, and a pe under 10., so price to earnings under 10., so if you're looking for a more conservative approach where you don't have as much upside but also not as much risk and there's a big chunk of droppedness going on minus eight percent, you might consider actually looking into jp morgan now i'll show an example where I would see a problem with investing in another bank, so i want to talk to you a little bit quickly about bank of america. Now, if you look at bank of america you're going to see something really interesting right right here, real quick! So everything is impressive. About bank of america, but the problem is a lot of people say: well, why not bank of america, so bank of america is going to be a nice little contrast of why this is already too expensive. So a company with 12 and a half pe and a 3.8 price to sales yeah those multiples, it's gon na be tough um, even though the stock slipped a little bit over the past three months: minus six percent, but there's better options.

I feel like twelve and a half and three point: eight for a company, that's giving you about 20 to 25 billion a year revenues there's better options we saw today. So this is a good contrast to show you how citigroup and goldman sachs and wells fargo, maybe even jp morgan, are actually better options now, as always, i hope you enjoy this video. I hope this list makes sense to you. If it doesn't, let me know below why, if it does, let me know below why now, if you just want to say, hey tom, your douchebag, let me know below why hey huge shout out to the channel members and the patreons you make this community happen.

Thank you so much we'll see you tomorrow.