President-Elect Trump trades

[Spekulatius]

Well. I asked perplexity with a few angles and it insists on rising energy prices. I don’t think it makes sense though:

 

If China were blocked from purchasing crude oil or other energy products, global energy prices could still rise due to several factors. Firstly, China is a major consumer of energy, and a sudden drop in its demand could lead to market volatility and uncertainty. Additionally, the geopolitical tensions and potential military conflicts associated with such a blockade could disrupt global supply chains and increase transportation and insurance costs. Furthermore, other countries might increase their strategic reserves or alter trade routes, leading to temporary supply shortages and price spikes in the global market.

 

Energy prices would rise in China, but would drop like a stone for everyone else, because the oil destined for China would have no where to go. I agree a short term spike is possible ,  but if you think about it China imports roughly 11M brl of crude per day which might go to zero. Total worldwide production is 82M brl, so that’s more than 13% of the oil production that has nowhere to go.

 

Now China can still import some oil with a pipeline from Russia, but one cruise missile could take out a pipeline for good for a while.

Edited Saturday at 12:29 PM by Spekulatius

[Spekulatius]

Another Trump fan mentioned to me via social media that Trump is lowering interest rates on credit cards. I think he mentioned in one or two rallies. Thats all I say about this:

 

[Spekulatius]

Most people who voted for Trump bet on the jockey not on the horse. They have no idea where the horse is going to go. I think the Trump trade is harder than it seems.

 

For example, if Elon with his Government efficiency commission (note the Orwellian vibe) comes through, shouldn’t defense stocks crash? Or the AE energy credits and EV credits get slashed, killing TSLA bottom line? Perhaps all the redneck disabled folks that @dealraker mentioned actually need to get jobs?

 

Edited Saturday at 12:50 PM by Spekulatius

[dealraker]

Just now, Spekulatius said:

Most people who voted for Trump bet on the jockey not on the horse. They have no idea where the horse is going to go. I think the Trump trade is harder than it seems.

 

For example, if Elon with his Government efficiency commission (not the Orwellian vibe) comes through, shouldn’t defense stocks crash? Or the AE energy credits and EV credits get slashed, killing TSLA bottom line? Perhaps all the redneck disabled folks that @dealraker mentioned actually need to get jobs?

Cubs mentioned taking care of our own which of course we surely all want.  Now let's just say Cubs is a construction contractor business owner in my area (booming), either small where he physically participates or large where he leads an office full of support staff and multiple job foremen.  And with this Cubs must only employ local legals.  I am literally laying on the floor with belly cramps from laughing violently at the entertainment of watching Cubs try to find help from this prescribed legal local bunch.  

[mattee2264]

If Trump has little interest in climate change that will reduce some of the existential/obsolescence risk in relation to energy stocks so that might be moderately bullish. 

 

Shale has a pretty rapid depletion rate so if oil prices fall drilling will stop and that will push prices up. Already at $70 it is not economical for a lot of private energy companies to produce.

 

There might be more consolidation in the energy space if low energy prices push down stock prices and private market values of smaller outfits. 

 

If the economy grows faster under Trump that is also bullish similarly if China do eventually give some kind of stimulus.

 

 

[73 Reds]

3 minutes ago, dealraker said:

Cubs mentioned taking care of our own which of course we surely all want.  Now let's just say Cubs is a construction contractor business owner in my area (booming), either small where he physically participates or large where he leads an office full of support staff and multiple job foremen.  And with this Cubs must only employ local legals.  I am literally laying on the floor with belly cramps from laughing violently at the entertainment of watching Cubs try to find help from this prescribed legal local bunch.  

So, are you proscribing that we continue to allow illegal immigration?  I don't understand your point. 

[sleepydragon]

47 minutes ago, Spekulatius said:

Well. I asked perplexity with a few angles and it insists on rising energy prices. I don’t think it makes sense though:

 

If China were blocked from purchasing crude oil or other energy products, global energy prices could still rise due to several factors. Firstly, China is a major consumer of energy, and a sudden drop in its demand could lead to market volatility and uncertainty. Additionally, the geopolitical tensions and potential military conflicts associated with such a blockade could disrupt global supply chains and increase transportation and insurance costs. Furthermore, other countries might increase their strategic reserves or alter trade routes, leading to temporary supply shortages and price spikes in the global market.

 

Energy prices would rise in China, but would drop like a stone for everyone else, because the oil destined for China would have no where to go. I agree a short term spike is possible ,  but if you think about it China imports roughly 11M brl of crude per day which might go to zero. Total worldwide production is 82M brl, so that’s more than 13% of the oil production that has nowhere to go.

 

Now China can still import some oil with a pipeline from Russia, but one cruise missile could take out a pipeline for good for a while.

yeah, it’s weird. Chat gpt had no ability to “think”. It merely try to synthesize the vast contents it found online. Maybe it associates geo political to crude price rising, but in the past geo political events always involves an oil supplier, thus it’s giving the wrong conclusion this time

[Junior R]

the problem with the current run up in stocks is even if trump lowers taxes and implements friendly polices many stocks are still going be overvalued..It would have been easier for trump if stock market was down 20% before he takes office so he could take credits on the way back up...but not sure its going happen animal sprits are out in full force lol 

[sleepydragon]

5 minutes ago, Junior R said:

the problem with the current run up in stocks is even if trump lowers taxes and implements friendly polices many stocks are still going be overvalued..It would have been easier for trump if stock market was down 20% before he takes office so he could take credits on the way back up...but not sure its going happen animal sprits are out in full force lol 

he can try to talk down the market before he starts the job,  

[Junior R]

8 minutes ago, sleepydragon said:

he can try to talk down the market before he starts the job,  

lol or he just asks Jim Cramer to say S&P going to 7000 by end of Jan lol

[Spekulatius]

25 minutes ago, Junior R said:

the problem with the current run up in stocks is even if trump lowers taxes and implements friendly polices many stocks are still going be overvalued..It would have been easier for trump if stock market was down 20% before he takes office so he could take credits on the way back up...but not sure its going happen animal sprits are out in full force lol 

Haha, Biden’s track record get better and better. Record energy production. Stock market up 80% or so. inflation down to 2.5%. Real wages up. Literally anyone is better then 4 years go. It’s quite interesting how perception is so disconnected from economic reality.

 

On Trump trades - the lower taxes don’t done thing for tech, which is the ditching force for the stock market. Check big techs tax rates, which is way below statutory rates. thats why they ere silent about it, they dont care.

 

Smaller community banks do pay statutory tax rates, so there is an angle there. I would be careful with the likes of BofA and their ~$800B MBS holdings if Trump, policies are indeed inflationary. Then they have to carry this bag of bricks around another 5 years at least until it melts off enough to do no more damage and if rates skyrockets, it could actually get scary. Anyways, we have a golden opportunity to dump our bank stocks , so no need to really have to worry about that one.

 

I would avoid anything related to farmings (ADM, farm machinery etc) as AG market are already weak and retaliatory tariffs likely target farm goods.

 

I think likely beneficiaries are small domestic industrial producers who now have to compete with Chinese exporters. I have a few ideas but need to do more research. I do find that a lot of them have a large part of their supply chains in China or Asia as well, so not sure how this would out. They are also crummy businessmen general.

 

Defense could go either way.

 

For energy, I think Trumps less regulation may be a slight negative, but probably doesn’t matter much.

I think something like ATKR might work (less foreign competition and they can continue to roll up domestic competition).

[james22]

1 hour ago, Spekulatius said:

... Elon with his Government efficiency commission (note the Orwellian vibe) ...

 

Project much?

 

Named after the joke meme coin.

[Spekulatius]

Anyone here is worse off economically than 4 years ago? I don’t know anyone, seriously.

[mcliu]

SP500 vs Russell 2000

Tech companies and their few hundred thousand of employees and shareholders have done really well.. Not sure about everyone else.

 

[cubsfan]

2 hours ago, dealraker said:

Cubs mentioned taking care of our own which of course we surely all want.  Now let's just say Cubs is a construction contractor business owner in my area (booming), either small where he physically participates or large where he leads an office full of support staff and multiple job foremen.  And with this Cubs must only employ local legals.  I am literally laying on the floor with belly cramps from laughing violently at the entertainment of watching Cubs try to find help from this prescribed legal local bunch.  

 

@dealraker You're a good man, one I respect - so happy to clarify for you. The open border has been a disaster - I hope you might agree. You close the border to stop crime & drugs, first of all. Then you concentrate on getting all the criminal element out of the country - the murderers & rapists that wrecked families. I hope you don't see them as collateral damage as so many Democrats do. The country is full of gang members where jails were emptied out. The crime likely doesn't impact you, but it certainly does in the inner cities.  Folks in the inner cities, 50% hispanic & 20% black voted to get crime & drugs under control.

 

At some point, you can give out work visas - which should be the right way to enforce a reasonable immigration policy. Not sure why you would want to have open borders other than you have a vested interest to make money with illegal labor?   Should be real easy to make adjustments so the economy doesn't collapse like you are saying.

 

Most Americans admire immigrants that contribute with both work & cultural assimilation into OUR country.  No need to exaggerate my point.

[cubsfan]

1 hour ago, dealraker said:

Spek, speaking facts is a serious no-no.  Hope you are wearing your hard hat!

 

You guys sound like The View. 70% of Americans surveyed say the economy is in bad shape and impacted them negatively. Take the elitist hat off for once and see it from their viewpoint.

 

They want their wages to go up, just like grocery prices and inflation. 

It's pretty damn simple.

 

The reason the election was lost was because the party kept telling the middle class how wonderful life was - and they didn't believe it.

Edited Saturday at 03:34 PM by cubsfan

[Milu]

52 minutes ago, Spekulatius said:

Anyone here is worse off economically than 4 years ago? I don’t know anyone, seriously.

I don’t think the answers from a bunch of most likely frugal long term equity investors is going to give you an adequate assessment of the possible struggles of the average working class American.

[John Hjorth]

2 hours ago, dealraker said:

No, 73 Reds I am not.  But a reasonable immigration program is not in place...so I don't understand your point either.

 

Years ago states had welfare programs.  But states don't have the ability to print and do deficits.  So states hired lawyers to ween people off welfare to fed disability.

 

The transition is 100%, today it is a lawyers and doctors power train of fees.  West Virginia has well up in the double digits of working age men on disability as are many areas near my home in NC, some lawyers and judges have thousands of cases of 100% success...not one failed case of successful disability claims.

 

Now, who is involved?  Locally, right here in 80% Trump world where I live, lets just say you just graduated from the local high school.  You are academically limited, thus in the programs for such students.  First step post grad is to file disability.  Yep, gunna be a near 100% chance you get that.  Or let's say, social services got involved with you at an earlier stage of life where you were deemed of irresponsible parenting.  Another 100% post high school disability filing.  "The way I was brought up...I didn't go to school regularly....got me on disability now."  Do you know the number of times I have heard that?

 

What do these young people do?  When young they tend to work part time, and live with relatives (no house or separate renting).  Often they will move around from job to job (young men) working for cash.  Drugs....yes....excessive alcohol....yes....

 

As they age?  Homebound is often the theme.  Didn't take care of themselves either physically or mentally, and the very thought of steady work is impossible to comprehend by this point for them - a continuations of culture that isn't productive now for generations.  You see this is massive numbers in rural NC in the areas near my home.  Unkept homes, steady high crime, all locals...and drug dealing/using in mass!  Walking to the mailbox by age 50?  They all use motorized scooters for that!

 

I am an off the chart social liberal, the very thought of human beings with cultist religious or other lifestyle choices trying to control one another drives me crazy.  But I am also financial, I think financially, and we simply can not afford this spending of money.

 

And America needs to look within, not towards others, for change.  It is ok to have a Trump mentality if you are privileged like he is.  But what if all young lesser capable men attain the Trump intermittent unpredictable nasty view of all things that don't cater to them?  That's what too large a percentage of our young people have adopted as their world view and life culture.  Work ethic?  Oh my.

 

Could the near 20% working age male disability in many rural areas be a huge source of construction labor?  

 

To add to this delicious post LOL.  In 2018 my neighbor accidentally burned down my boat garage (and boats!).  I personally, with a couple of my buddies, rebuilt it.  Yep poured the concrete, laid the bricks, framed and...

 

...as to the roof?  Nope, hired a local roofing co.  The owner tries to employ legals!  So down they come to do my metal roof.   Foreman says, "With the bunch I've got...no telling who shows up."   One guy comes, he had no shoes.  So he's my size and I go in the house and get a pair of old hiking shoes.  Foreman says, "Damn Charlie....don't you dare give those shoes to him!"  I asked, "Why not?"  Foreman, replies, "He'll sell them for drug money...then he won's show up for days!"

 

Thank you for sharing, Charlie [ @dealraker ],

 

For a Northern European citizen like me, this is really a shocking read. It - simply put - reads - to me - as if your society is gradually, but surely, falling apart.

 

[This does not constitute a personal expression of that I personally think that I live a place, where there are no problems and challenges, - because there are a lot of things and lots of places with space for improvements, also here.]

[james22]

1 hour ago, Spekulatius said:

Anyone here is worse off economically than 4 years ago? I don’t know anyone, seriously.

 

For what will it profit a man if he gains the whole world and forfeits his soul?

[Spekulatius]

1 hour ago, Milu said:

I don’t think the answers from a bunch of most likely frugal long term equity investors is going to give you an adequate assessment of the possible struggles of the average working class American.

This is true,  but I still wonder. My sons first summer job in a supermarket  was $11/h (the year before it would have been $8.5, then three pulling later he was pulling in $20+. He did not take this job because he found a job at a restaurant where he pulling down even more with tips. Prior experience: none. Just show up somewhere and you got a job.
 

Compounded inflation is maybe 30% but for sure not a double. How can you not be better off in this environment? I think perception does not match realty

 

Now the salary increases for middle class jobs have been less, but I am fairly sure it matches or exceeds inflation. Also unemployment is non existent. I mean, I got laid off and found a new job although it took a couple of months. I am much closer to 60 years old than 50 for context.

US homeownership is 65% and we all know how well homeowners do sitting on 2.x % mortgages. So 65% of people roughly speaking should to be better off.

 

What the hell do people do to be worse off?

Edited Saturday at 05:15 PM by Spekulatius

[tnathan]

Totally agree -- I think perception plays such a big role in this, and perception does not match reality. When you get your news from sources that have a vested interest in telling you that you're worse off and that you should blame a lot of this on people who don't have the same skin color / are from the deep state / from a different country as you, it breads crazy amounts of resentment and that is simply misplaced. Makes me incredibly sad and I've been around long enough to know that the economic literacy in this country is so bad that people likely can't reason through things themselves and just believe whatever Fox BS propoganda they are seeing. 

[cubsfan]

21 minutes ago, tnathan said:

Totally agree -- I think perception plays such a big role in this, and perception does not match reality. When you get your news from sources that have a vested interest in telling you that you're worse off and that you should blame a lot of this on people who don't have the same skin color / are from the deep state / from a different country as you, it breads crazy amounts of resentment and that is simply misplaced. Makes me incredibly sad and I've been around long enough to know that the economic literacy in this country is so bad that people likely can't reason through things themselves and just believe whatever Fox BS propoganda they are seeing. 

 

Wow - you guys have such a warped perspective. You've no idea why the election was lost.

You think people were brainwashed by MAGA.

 

Simply amazing.

[tnathan]

I'm very open to hearing other better interpretations -- do you have specific data that points to what we've said clearly not being true? By all accounts the data is on one side of the argument, and perception is on the other side.

[tnathan]

I would also point to that the left clearly has gone further left on social issues and that makes a lot of people uncomfortable, across demographics. If they want to win elections that have to tone that down -- for better or worse

[Paarslaars]

Yeah they lost the male latino population with the woke shit.

Edited Saturday at 06:01 PM by Paarslaars