President-Elect Trump trades

[gfp]

Well I should have held on to my Nov. 15 92-strike TLT puts a few days longer but besides that -

 

Here is a thread for some investment themes that will benefit or suffer during the new Trump administration.

 

It is not clear to me how Trump becoming president again is positive for Tesla or DJT stock - two early pops on the news.  I am tempted to fade both rallies.

 

DJT especially seems to be a very tempting sell for the president-elect.

 

Why is Trump's second term a positive for DJT or TSLA shares?

 

Initial market moves are long-term interest rates higher.  Oil prices down (bad for that industry).  BTC up.

 

 

Edited November 12 by gfp

[rogermunibond]

Look at the percentage gainers and losers this morning.

 

That's your Trump trade right there.  The market is moving fast.

[moneyball]

I find the Gold/BTC relative performance interesting.

 

Also speaking out of turn, but strong USD a tad surprising. 

 

Believe Trump will favor fiscal dominance, but I guess we will see.

[orthopa]

remember fannie mae and freddie mac...........?

 

I bet Trump et al gets it done this time. Senate control makes FHFA head approval a breeze. FHFA director serves at pleasure of the president. Treasury Secretary could be Paulson. Wall street Journal article said admin has already talked to Wall Street and looking at recap options. 

 

Ive been long foolishly since 2016. Vindication may finally be here. 

[Intelligent_Investor]

Markets up bigly so I'd say stocks in general are a Trump trade

[KCLarkin]

Can anyone explain the move in banks? I don't get it. We already had a trump trade in financials that went bust. And that was with Mnuchin at treasury. Wishful thinking?

 

 

[gfp]

Just now, KCLarkin said:

Can anyone explain the move in banks? I don't get it. We already had a trump trade in financials that went bust. And that was with Mnuchin at treasury. Wishful thinking?

 

 

 

Trump is the ultimate curve steepener - pressure on the Fed to lower the short end (and new Fed chair taking a dovish vow of loyalty) coupled with higher rates at longer maturities.  Plus less regulation and low taxes but that is not bank-specific per se

[sleepydragon]

1 hour ago, gfp said:

Well I should have held on to my Nov. 15 92-strike TLT puts a few days longer but besides that -

 

Here is a thread for some investment themes that will benefit or suffer during the new Trump administration.

 

It is not clear to me how Trump becoming president again is positive for Tesla or DJT stock - two early pops on the news.  I am tempted to fade both rallies.

 

DJT especially seems to be a very tempting sell for the president-elect.

 

Why is Trump's second term a positive for DJT or TSLA shares?

 

Initial market moves are long-term interest rates higher.  Oil prices down (bad for that industry).  BTC up.

 

 

Bad for oil price but good for US oil companies 

[yesman182]

What about mergers like Albertsons and Kroger? Aren’t they all more likely now? 

[Castanza]

49 minutes ago, orthopa said:

remember fannie mae and freddie mac...........?

 

I bet Trump et al gets it done this time. Senate control makes FHFA head approval a breeze. FHFA director serves at pleasure of the president. Treasury Secretary could be Paulson. Wall street Journal article said admin has already talked to Wall Street and looking at recap options. 

 

Ive been long foolishly since 2016. Vindication may finally be here. 

 

Senate still might be tough if there is only a marginal advantage in seat count. There are a handful of republican seats that swing the other way pretty frequently. Hope it works out though....holders have been in purgatory forever. 

[brobro777]

IBKR Forecast Contracts were good Trump trades for me 

 

haha

 

[Red Lion]

18 minutes ago, gfp said:

 

Trump is the ultimate curve steepener - pressure on the Fed to lower the short end (and new Fed chair taking a dovish vow of loyalty) coupled with higher rates at longer maturities.  Plus less regulation and low taxes but that is not bank-specific per se

 

Couldn't you see a situation with political pressure for quantitative easing to lower borrowing costs and bolster investment in on shoring? I don't see why Trump can't exert political pressure on the Fed to use all of its financial wizardry? 

 

I know the curve steepener seems to be the consensus, but the consensus is so often wrong and there are many moving parts here, and we probably won't know for a couple years how things play out. 

 

If the US economy is blowing up, leading in AI, huge GDP lift from on-shoring and lower taxes, and the rest of the world is going back to ZIRP, what's to prevent the US from doing that too? Run things a little hot and grow the economy back to proportion with our debt load. Play some financial engineering and still maintain a strong (enough) dollar with lower rates and lower regulation and lower taxes.

 

Maybe it's just wishful thinking, I'm not necessarily betting on this outcome, but I think it's a lot more likely than before the red wave we just had. 

 

 

[rogermunibond]

Re Banks - lighter regulatory touch with Trump and Senate moving Repub.  Sherrod Brown out as Senate Banking chair.

[sleepydragon]

How come defense stocks barely moved? Is trump win not good for defense companies?

 

gold and dollar move is also a head scratcher for me

[TwoCitiesCapital]

3 hours ago, gfp said:

It is not clear to me how Trump becoming president again is positive for Tesla or DJT stock - two early pops on the news.  I am tempted to fade both rallies.

 

Why is Trump's second term a positive for DJT or TSLA shares?

 

 Because, like most autocrats, Trump values loyalty. And Elon Musk spent $130 million to "buy" the appearance of his loyalty despite having been über critical of Trump in his first term. 

 

Trump is absolutely the type to throw friends a bone (most politicians are) and id expect he might allow for some regulatory wins that benefit Tesla over its peers - like going easier on self driving tech or something of the like. 

Edited November 6 by TwoCitiesCapital

[backtothebeach]

Who knew old slow Berkshire was a Trump trade stock... up almost 5%. No tax on unrealized capital gains, lower capital gains tax may play a role.

 

Others from my watchlists:

 

Bitcoin/IBIT all time high

CLF up 20% (bet on tariffs I suppose. They were down 10% the day before on earnings)

DXYZ up 30+%

ENPH down 17%

VTS up 5% all time high

 

German auto makers VOW3, MBG down another 4-6%

[gfp]

15 minutes ago, backtothebeach said:

Who knew old slow Berkshire was a Trump trade stock... up almost 5%. No tax on unrealized capital gains, lower capital gains tax may play a role.

 

Others from my watchlists:

 

Bitcoin/IBIT all time high

CLF up 20% (bet on tariffs I suppose. They were down 10% the day before on earnings)

DXYZ up 30+%

ENPH down 17%

VTS up 5% all time high

 

German auto makers VOW3, MBG down another 4-6%

 

Berkshire is such a huge cash tax payer with large unrealized gains so Berkshire is very sensitive to any perceived move in the corporate income tax rate.  Capital Gains tax rates apply to individuals not corporations.

 

I suppose if Fairfax is going to hold a chunk of CLF for a while it's good to see them trade up.  Automotive outlook isn't great but I guess Stelco dilutes their exposure to automotive OEMs.

[backtothebeach]

6 minutes ago, gfp said:

Berkshire is very sensitive to any perceived move in the corporate income tax rate.  Capital Gains tax rates apply to individuals not corporations.

That's what I meant, got the two mixed up.

[KCLarkin]

Am I delusional or did almost all of the 2016 "trump trades" fail?

 

Going from memory, but IIRC:

Financials

Fannie and Freddie

For-profit prisons

For-profit education?

Manufacturing?

Energy

 

Did any of the 2016 trump trades outperform SPY or QQQ over Trump's term?

[TwoCitiesCapital]

18 minutes ago, KCLarkin said:

Am I delusional or did almost all of the 2016 "trump trades" fail?

 

Going from memory, but IIRC:

Financials

Fannie and Freddie

For-profit prisons

For-profit education?

Manufacturing?

Energy

 

Did any of the 2016 trump trades outperform SPY or QQQ over Trump's term?

 

You're not delusional. The people that expect this time will be different, but cannot say why, are. 

[mattee2264]

How do people think Big Tech will do under Trump?

I can't imagine Republicans being as interested in anti-trust action as the Democrats were.

I agree that Trump will probably throw Tesla quite a few bones.

Might be some impact from protectionism on global profits especially if other countries retaliate.

And if there is more confidence in economic growth under Trump you'd expect a bit of a rotation to cyclical/value stocks that would mean a rotation away from Big Tech.

 

[Junior R]

the trump trade has pushed some stocks to even higher PE ratio ...time will tell...but it has also pushed down some other stocks lol

[james22]

2 hours ago, TwoCitiesCapital said:

You're not delusional. The people that expect this time will be different, but cannot say why, are. 

 

If you believe he's learned nothing and the establishment opposition isn't weakened?

 

Delusional.

[KCLarkin]

50 minutes ago, james22 said:

 

If you believe he's learned nothing and the establishment opposition isn't weakened?

 

Delusional.

 

Just super weird to me that people are putting on the exact same trades that didn't work last time...

---

Edit to add:

 

This Gurufocus article seems delusional (in the context that GEO had something like a 65% drawdown during Trump's first term):

 

During Trump's first term, GEO Group was on a steady climb, securing massive contracts with ICE and benefiting from stricter immigration enforcement that ramped up the need for detention space. The playbook here is simple: with Trump back in office, investors see the potential for a replay of these high-demand conditions. GEO Group's unique position in the private detention market could turn a policy shift into another big payday, with federal contracts piling up and revenue set to spike.

 

 

 

 

Edited November 6 by KCLarkin

[backtothebeach]

Interesting that DG and DLTR also suffered today.