As Experts Talk "Trump Trade," Here's How to Win
Plus six stocks for Wealth Builders ...
My wife, son and I had just pulled into the driveway at our home near Baltimore Saturday evening (we’d been in Boston on a college visit for Joey) when the deluge of headlines about the former U.S. President Donald Trump assassination attempt started to flow.
As a guy who spent nearly 25 years as a journalist for some pretty good news organizations, I knew exactly how “The News” narrative would play out.
I mean, as an “ex-reporter” (in reality, there’s no such thing), I start dissecting big stories like this one as they unfold … thinking about the “angles” I’d pursue to get out in front of the story. For instance, when it first became clear that former President Trump had been targeted by a rooftop sniper, I told a close friend that the “Secret Service Goofed” would turn into a media feeding frenzy. With a dismissive “Nope,” he told me I was way off base.
But I knew better: Though business, investing and the economy were my main “beats” through those years, I have covered presidential events. I’ve worked inside newsrooms and pursued big stories – so I know that media frenzies and pack journalism is a “thing.” And within hours, the Secret Service storyline (“How did the shooter get so close?”) was indeed a front-and-center part of the Butler cacophony.
And as the hours passed, the story progressed and the reporters fanned out and drafted more of their journalist brethren, I knew what to expect after that. Reporters would start writing the “impact" stories. What does this mean for the campaigns? What does this mean for the election?
And what does this mean for the economy? For the stock market? For investors?
In short order, I knew, we’d start seeing headlines about the “Trump Trade.”
Business journalists would want to “get ahead” of that story, too — by publishing it first, or by finding a “unique angle” or a “unique way to tell that story.”
Here’s where I take off my “Former Reporter Hat” — and switch to my “Chief Stock Picker” counterpart. Because this is where an odd irony surfaces — one where first-mover winner reporters create too-late-to-the-game loser investors.
Journalists make their bones by being first … by “breaking” a story … by being ahead.
But if you’re an investor who reacts to that story — even if you’re one of the early folks to do so — you’re actually already behind … if not an outright loser.
As the Wealth Builders we are, we don’t want to “get ahead” of the Trump Trade story.
We don’t have to.
We have our own “storylines” to follow.
I’m going to use one headline from one story to show you exactly what I mean.
And I’ll even share some stocks you can use as starting points for your research.
This Headline Hit Home
At one point Sunday, as I perused the latest headlines about the tragedy in Butler, Pennsylvania, the story I’d expected crawled across my “feed.”
A Fortune magazine story about the “Trump Trade.”
I’m not picking on Fortune — there were plenty of stories just like this. But this one is perfect to dissect — in its component elements — to understand the massive missteps retail investors are getting set up to take if they “react” to this news by changing their personal money strategy. Let me break this down:
What Investors Should Look For: This verbiage essentially says “you don’t already have an investment plan/strategy/belief system” … or that, if you do – and it doesn’t agree with this “new” view – you should change it.
As Wall Street Prices In: The understanding here is that you should let “Wall Street” set your priorities for you. That you should let “Wall Street” do your thinking for you. Or, more specifically, you’re following Wall Street’s lead – instead of following your own. This means you’re reacting – or playing “catch up.” And that implies you are behind. Even if you aren’t.
A New Political And Financial Outlook: A “new outlook” implies that we’re playing a short-term game – not the long game that winning Wealth Builders stick with. And what’s “new” today can be “old” (i.e. irrelevant) tomorrow.
After the Trump Shooting: Once again, we’re playing that biggest of all “loser” strategies – “catch up.” Please understand, I’m not minimizing the tragedy here. Not at all (especially given the loss of a guy who was a family man). I’m intentionally oversimplifying this to focus on this single, specific storyline that’s emanated from the assassination attempt in Butler. But if this incident changes our investing strategy on its ear today, something else will come along that has the same effect tomorrow. Maybe it’s the next Fed meeting. The next inflation report. The next earnings update. Those are less “tragic” in scope. But they have the same magnetically obsessive effect. That’s the kind of frenetic, speculative game that traders play. And we’re not traders. We’re actually even more than investors. We’re Wealth Builders. Having made that point, there is one super-important takeaway this story creates: It reminds us — yet again and with an amplified poignance — the importance of controlling your financial destiny. For yourself. And for your family. There’s more information than ever — but less meaning. That escalates uncertainty, meaning you need to be proactive — not reactive. Take control. Chart your course. Know yourself. And win.
So I’ve set the table here … I’ve demonstrated the trap doors this prevailing mindset can spring.
Here’s the right way to travel here …
Two Beliefs - And Six Ways to Win
You’ve heard me say two things here so often that you can probably recite them by rote:
Belief No. 1: You’re either a Wealth Builder or a Wealth Killer. There’s no middle ground.
And Belief No. 2: And if you find the best storylines, you’ll find the best stocks. That kind of strategy demands a longer-term view. And it’s in the long run that you’ll build real wealth – which loops us back to Belief No. 1.
Those are two pretty simple beliefs. But there’s power in that simplicity. And against a backdrop of clearly escalating uncertainty — one that demands we control our own financial destiny — that simplicity makes the strategy an easy one to follow.
And since I believe so fervently in storylines, here’s how the near-term storyline of the Butler Tragedy and the political landscape shift it seems to be fostering fits into the longer-term run we advocate.
Find the Best Storylines: Some of the storylines I’m following include the New Cold War and the AI Era. The political storyline that’s growing out of the Trump shooting does nothing but strengthen those already strong narratives. A Trump presidency will continue the surge in military spending. It will also continue the trend toward deglobalization, which includes the shift of manufacturing back to North America. That trend toward “inshoring,” is being additionally fueled by AI, and its huge appetite for semiconductors. Stocks to consider here include chip-equipment producer ASML Holding ASML 0.00%↑, chipmaker Broadcom Inc. AVGO 0.00%↑ and data-center czar Blackstone Inc. BX 0.00%↑.
Look For “Special Situations:” You can find unique opportunities – if you look hard enough. Given the explosion in global debt that’s certain to accelerate no matter who wins the White House, silver figures to be a strong play for the next few years. And the same long-term supply shortfall we see for silver and other crucial commodities is almost certain to be true for coal, as well. Natural Resource Partners LP NRP 0.00%↑ is a play on the projected mineral shortfall. I also recently interviewed fellow Substacker Six Bravo, who shared Texas Pacific Land Corp. TPL 0.00%↑ , which is an energy play and also a play on water – one of my favorite long-term storylines.
Be a Wealth Builder: Wealth Killers trade. Wealth Builders invest. In fact, as Wealth Builders, we’re more than just “investors.” We like individual stocks because they can let you capitalize on the narratives we find. Make time your ally by investing for the long haul – three, five, eight, 10 years – or longer. We’re not talking about “buy-and-hold forever.” A time frame of at least 10 years is an optimal holding period to think about. And this strategy lets you “accumulate” your way to wealth by adding to the stakes you’ve taken in those promising narratives.
Not a Wealth Killer: With apologies to that old maxim “neither a borrower nor a lender be,” I adhere to the corollary “neither a trader nor a speculator be.” Wealth Killers trade … and speculate. They take “flyers” on stocks. They play tips and hunches. They don’t do the research. They chase opportunities – like the “Trump Trade.” They don’t chart their own course. Worst of all: They “play” the options game. If you’re a retail investor, excise the very word “options” from your personal lexicon. Even better: Profit from these profligate proclivities of Wealth Killers. Worldwide trading – options and futures – soared a stunning 64% to 137.3 billion contracts last year, says the Futures Industry Association (FIA), the trade group for the derivatives industry. Profit here by investing in CBOE Global Markets Inc. CBOE 0.00%↑, an exchange and a beneficiary of all this action.
The Future I Want - For You
As I write this, it’s late.
This year marks my 40th anniversary of joining the professional writer ranks. In February 1984, after my graduation from Penn State a few months before, I joined the staff of The Record, a weekly in Havre de Grace, Maryland.
I spent the next 22 years in noisy newsrooms (a magazine once described the old Baltimore Sun newsroom as having the appearance of “the accounting office of a bankrupt Italian airline” … whatever that is).
So even now, when I write, I’ll often have a movie, reruns of Law & Order, recordings of old radio dramas, or the news or financial news running for “background noise.”
My “background noise” right now happens to be the newscasters giving the latest details (and their latest “takes”) on the tragedy in Butler … on the family sacrifice made by Corey Comperatore … and on the “what happens next.”
Down the hall, my wife RK has been asleep for hours. And my son Joey – already tired from our Boston college trip and our weekly Sunday evening dinner with my Mom – came out to check on Chase, our Border Collie, before heading off to sleep himself.
That’s the “what comes next” I care about.
I want to protect my wife, son, Mom, sisters and a handful of close friends from the financial, social and political uncertainties to come - both U.S. and global.
I include my readers in that protected enclave, too. I want you to have the same certainty, security and “full-wealth life” for your family that I seek for mine.
And that wish for you is part of what drives my work.
See you next time;
