| More Articles | Free Reports | Premium Services We were wrong. After yesterday’s election, we expected a bitter post-election battle in the courts as both candidates contested the results. But the whole thing went smoothly. And Donald Trump will be returning to the White House without a hitch. That’s okay. I’ve been positioning you to do well in one outcome and do better in the other. Heads, we win. Tails, we win more. Still, the last few weeks my focus has been on preparing for extreme volatility. That’s no longer on the table, so we shift gears. And for folks who recently joined our Freeport Alpha service, I’ll have more for you on our trading strategy later today. I’ve also recorded a short video about what’s to come, which you can find at the bottom of this issue. Today, let’s turn to what a Trump presidency means for us as investors. We’ve seen this movie before. There will be some good policies. There will be some bad policies. More than anything, there will be a lot of noise. Our goal is to cut through the noise and focus on the real underlying trends. What changes? What doesn’t? And how does this affect our wealth? Let’s start with what changes. Good News for Taxes, Crypto, and Tech Trump’s win means there’s a better chance his 2017 tax cuts get renewed. It’s still subject to negotiation with Congress. That may not be a sure thing given the tight margins. Republicans have reclaimed the Senate. But the House remains up for grabs (at this writing). But the odds are good that tax rates stay around current levels. If Trump can deliver on his campaign promises, they may even go lower. We’re also likely to see a more relaxed attitude to regulation – particularly around technology. As I wrote about yesterday, the artificial intelligence (AI) revolution was happening with or without Trump. Now, we’re taking off the training wheels. It’s going to be wild. It’s going to be chaotic. It’s going to create fantastic opportunities for us. The more relaxed approach to regulation is also a major boost to Bitcoin and other cryptocurrencies. Bitcoin hit a record high of $75,000 as election night rolled on. President Biden’s SEC was downright hostile to crypto. Trump promises to leave the industry in peace. We’ve held Bitcoin in the model portfolio at our Freeport Investor advisory since we launched the service in December 2023. Subscribers who acted on that recommendation are up close to 80%. And I’m now more bullish than ever on the crypto. Finally, we’re going to see a lot less environmental, social, and governance (ESG) twaddle. At The Freeport Society, we put profit ahead of politics. That’s why, since we launched, we’ve looked for opportunities in oil and gas stocks that the ESG mafia pushed out of favor. A good stock is a good stock regardless of who’s in the White House. But this is clearly a better outcome for energy stocks. It’s not all cupcakes and roses though… The Inflation Crisis Isn’t Over Exit polls showed that the lingering effects of inflation were a major driver in Trump’s win. I get it. Biden and Harris were tone deaf about the cost-of-living crisis. But the factors driving inflation are still in place and may get worse during Trump’s new term. There are four main drivers of inflation: -
A chronic labor shortage brought on by the aging of the Baby Boomers. -
The collapse of globalization. -
Massive budget deficits. -
And a clueless Federal Reserve. Trump can’t make the Baby Boomers 10 years younger. There’s no magic solution to the labor shortage. Automation will eventually help. But it will take time. Globalization was already fraying before Trump’s first term. The decoupling from China accelerated under Trump. It didn’t reverse under Biden. If anything, Biden out trumped Trump on China. Now, we’re looking at higher tariffs that will accelerate this trend even more. And the budget deficit? Trump’s tax cuts will leave more money in Americans’ pockets. But they’ll also add trillions of dollars to the national debt. You can’t cut taxes without also cutting spending. And no president of our lifetimes has managed to do that. And what about the Fed? I don’t see a reality in which the Fed somehow gets more competent because the occupant of the White House changed. The Fed is structurally flawed. The presidential election doesn’t fix that. So, expect inflation to stick around for a while… and hedge accordingly. We’ve had gold – the classic inflation hedge – in the model portfolio at The Freeport Investor since we launched. We’re up about 35%. Unless the forces driving inflation somehow go away, expect more gains to come. Lingering Questions The election may be over, but there’s still a lot yet to be decided. What will Trump’s cabinet look like? Will Elon Musk have a role? What would that look like? There’s still more than two months until the inauguration… and the world doesn’t stop spinning. The Fed starts its two-day meeting today to decide on rate cuts. We’ll know tomorrow what they do on rates. So, the end of the election doesn’t mean the end of the Age of Chaos. As globalization continues to unwind, as wars continue to rage overseas, and as the national debt continues to climb, that trend remains intact. More than that, it’s still in its early innings. For now, let’s at least celebrate that the election went off without a hitch and that Americans have once again chosen a new president. And let’s get down to the business of making money. To life, liberty and the pursuit of wealth, | 
No comments:
Post a Comment