David Dreman says stocks are generally cheap, but he’s still expecting that the U.S. will be jolted by a “really major dose of inflation” at some point down the line.

“I’m not talking about at present — this could be two, three years out,” Dreman tells Forbes.com. “But I think we’re going to have a really major dose of inflation. Will it get as bad as it was from 1977 to 1981?  That horrendous period of inflation saw prices go up, on average, something like 9% a year? I don’t think we’ll get up there. But I think we might have some pretty major inflation ahead. That has major implications for both the stock and the bond market.”

Dreman says he’s structuring his portfolios with that in mind. “Again, it’s a few years out, but we might have some pretty serious inflation,” he says. “Stocks are one of the best places to be.” Dreman says history shows that stocks do well during inflationary periods. “They dip when you first see inflation hit,” he says. “That’s happened numerous times here. And it actually happened in a lot of other countries that had hyper inflation. But then the markets start moving up again.”

Dreman says he’s primarily focused on blue chips, and that investors don’t need to get too speculative — with big inflation as a tailwind, it won’t be hard to make money, he says. He adds that his portfolios are currently “almost 100% in equities at this point”, and says he particularly likes the oil exploration and development industry and some big banks.