Future Purchasing Power

Latest Buffett mail to stock holders, mentioned stock is better as compare with bond, because bond has higher risk to lose to inflation and lose purchasing power in future. If we look at what Buffett holds, most of the stocks can grow with inflation, eg. bank, Coca cola, Mastercard, Wal-mart, IBM, etc. Because customers will pay more with inflation, so the portfolio can maintain future purchasing power.

Here, let's discuss construction companies, they rely on new projects, whatever their competency, their profit stops when project finish. So the earnings is very hard to predict, of course, hard to predict the future purchasing power. I better to avoid this kind of companies, but look for companies able to benefit from inflation and maintain the purchasing power.