The richest people in the world: Bezos, Musk, Zuckerberg, Bill Gates have all sold billions of dollars worth of stock this year.

Does this mean that you should sell your stocks too?

The answer is a big no. But, there is a very important shift here. It seems like the markets have made a temporary top. Now, the game of sector rotation will start.

A simple strategy to do well in this market is to invest in firms/stocks which have pricing power.

The mechanics are very simple:

- The inputs costs for everything post excessive printing of money is going up like crazy.

- Very recently you would have read the news that firms like Asian Paints, HUL etc all are increasing their prices. They are doing it to cope up with rising input cost.

- Now guess, which firms can't increase their pricing in high inflationary environment? firms that have a limited brand value and no pricing power.

So to make money now in 2021 & 2022, buy firms with pricing power and sell firms that don't have much pricing power.

Credits: Akshat Shrivastava