Here are more notes from my talk “Stock Picks for the Next President” from the 2016 Technology Money Show in San Francisco.
Now before I start I want to be clear that, as anybody who remembers my old TV show on Fox or any of my appearances on the Tonight Show or other programs, I don’t vote for Republicans or Democrats and I will be writing myself in as President (See my Facebook page for more).
One of the advantages of being anti-partisan is that we can be more objective in how we view and analyze each candidate.
We’ve probably already been discounting a Hillary Clinton win. Call the rally off the lows of Brexit, as my hedge fund manager friend put it recently, “The Hillary Rally”. Right now, on NYTimes.com it says that Hillary has an 83% chance of winning. That’s about where I’d put. Of course, at some point, all the Hillary-is-going-to-win relief rally will have played itself out. Likewise, the risk that Trump makes a miraculous come back in the polls,
*Into the election, I expect we’ll see Hillary ratchet up the rhetoric about how health care corporations are engaging in price gouging. Health care stocks, specifically biotech stocks, are likely to get hit as the election grows closer.
*which is something I agree with, as the 90%+ gross margins at many biotech companies and other outsized gross margins in the health care industry writ large),
*Trump = market sell off near-term, but will be bullish borrowing at 0% for at least a couple more years.
*Dollar vs all other fiat currencies
Look, I’ve been writing about and prepared to profit from this ongoing Bubble-Blowing Bull Market for the last six years since I left TV and returned to trading. More recently, I’ve been outlining how negative interest rates around the world and how the US economic/monetary cycle plus corporate earnings and financial engineering have been very bullish for both stocks and gold. And those broader trends and cycles remain in tact.
But the markets — tech and my Revolution Investing stocks including Amazon, Facebook and Google specifically — have been on one heck of tear from the Brexit lows, when we had the opportunity to sneak in and buy some more of our favorite stocks at a temporary discount.
It’s not like I’m changing my stance, but the time to hedge is when you can and not when you have to. But that election looms and those who want Hilary or Trump, and think that their candidate will be best for the stock market, will become increasingly worried about the possibility that their candidate will lose.
I personally expect that Hillary will win and that she’ll basically keep the Bush/Obama/Republican-Democrat Regime status quo in tact with all the corruption, corporatism, Wall Street-controlled government that comes with it. That doesn’t mean smooth sailing for the stock market and the economy either. And the Republicans will claim they’re worried about socialism and the show will go on. If Trump wins, I’d expect we’ll see much of the same status quo with all the corruption, corporatism, Wall Street-controlled government that comes with it.
Which brings us back to the markets and the economy, of course. Obamacare, bank bailouts, reckless spending, infrastructure investment and anything else the US government wants to do is a lot easier to do and has a temporarily positive effect on the economy so long as the government can borrow money at close to 0%. And whatever Hillary or Trump spend our future generation’s money on by borrowing trillions will probably seem to work well at least while rates are this low.
Meanwhile, our lives, jobs, the Fed, the EU, the currency wars, energy, tech, innovation, and everything else that makes up these cycles, these economies, these societies we live in will go on.
We’ll have to continue to freshly analyze the economy, cycles and markets regardless.
But the market and the psychology that drives the stock market don’t always move in sync. And while the bears and many traders have been betting for the last few months that the markets would price in an election sell-off have been wrong. Maybe I’m early too. And maybe the markets won’t sell off at all, as the aforementioned bull forces continue to overpower election stress discounts.
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