I’m optimistic about the Trump Presidency. Despite all the stuff that offends people — the racism, the bigotry, the misogyny, etc. — there are some factors going in our favor:
1. He understands business. He’s richer than most people.
2. His ego and her narcissism won’t let him fail. He wants to be remembered as one of America’s great presidents. Maybe the best.
3. He doesn’t read. He doesn’t study. But he listens, has good instincts and values talented people. His rumored appointments look promising.
You have to be optimistic. You can’t wallow in the hate and self-pity I’m reading in the New Yorker (“An American Tragedy” — click here, the New York Times, or in Vanity Fair in Aaron Sorkin’s letter to his kids. Click here.
All the pundits are pitying themselves for being so wrong. They missed how much Trump appealed and how little Hillary did. All the pollsters are hiding, their heads hanging in shame.
Trump will screw up big-time. But he’ll also succeed big-time — just as he has in his life.
It will be a fun ride — if you can stand it.
It will be totally unpredictable. It’s the nature of his real estate business. It’s total opportunistic. A property comes along. You grab it. You develop it. You wait an eternity for local approvals. Then you build like crazy before the next cyclical downturn.
Because real estate is unpredictable, Donald is unpredictable. And stockmarkets will be unpredictable. Don’t try to predict this.
I love this recent warning from a famous economic guru:
For more of that Stockman prediction, click here.
Yesterday all the big names in tech dropped dramatically. Amazon, Facebook.Microsoft, Google.
No one could figure why. The pundits tried to blame it on Trump. Amazon was down because Bezos owns the Washington Post and it wrote stuff about Trump which he didn’t like. And Trump threatened.
Amazon was down, because Apple does too much manufacturing in China, keeps too much money abroad and Apple CEO Tim Cook raised money for Hillary.
Investopedia wrote:
Over the course of last year’s surreal election cycle, Amazon.com Inc. (AMZN) CEO Jeff Bezos and then Republican nominee Donald Trump sparred several times on social media as well as through television interviews.
Trump said that Amazon had a “huge anti-trust problem,” and added that “if I become president, oh, do they have problems. They’re going to have such problems.” Bezos, who has Democrat and Libertarian leanings, responded with a #sendDonaldtospace hashtag and said that he would reserve space for Trump on the company’s Blue Origin rockets. The Washington Post, which is owned by Bezos, assigned 20 reporters to investigate Trump and the team uncovered some embarrassing details about his charity foundation.The real estate mogul has accused Bezos of using the paper to protect his business interests.
It wasn’t pleasant. I own lots of Facebook and Amazon. My Berkshire Hathaway, Honeywell, Disney and Lockeed Martin did well. However. they didn’t make up for my tech losses.
The BIG Volatilities — stockmarket strategies:
My friend bought the triple short S&P 500 ETF at $12.70. He figured it would skyrocket as the markets cratered once Trump was anointed. It didn’t work. It’s now around $12.09. I’ve never liked triple ETFs. They rebalance every evening — a process I don’t understand, except it seems to remove profits for traders. The deal with these things is don’t hold them overnight, or, my preference, don’t go near them.
The BIG trade of the week, however, was shorting Smith and Wesson, the gun maker. Their sales skyrocket when Presidents who hate guns are anointed. Their sales plummet when they a gun-friendly president, like Mr. Trump, is anointed.
One friend is a successful trader — up about 26% this year. But, right now, he’s staying in cash. The volatility is too crazy, even for him.
This is is no longer a “Buy and Hold” market. With Trump around, that concept is now firmly buried.
Harry Newton, who is now in Portland, where it’s not raining. Miracles happen. The first time Susan and I came to Portland was one Thanksgiving. It was cold, wet, raining and totally miserable. We spent our visit shopping at REI, Patagonia, Columbia and North Face. Portland is the capital of wet weather outdoor gear. For this trip we brought enough raingear to survive a monsoon. And of course, this morning, it’s not raining . In fact the sunrise was beautiful. Maybe we should apply the same logic to a Trump Presidency?
Good article Harry – all we can do now (as ever) is hope that things turn out well. And initial impressions since the election are encouraging.
But the Sorkin letter makes me wonder – is there any set of facts, any amount of being proved wrong that would make dyed-in-the-wool Liberals admit they are wrong? I just hope he bet big against the market.
I think you need to look at a Trump presidency through a larger lens. You are making the mistake of taking at face value anything he said during the campaign.
This is not just because he lies like any other politician, and not just because he will be dealing with a business as usual Republican Congress whose priorities have been, are, and always will be tax cuts for the wealthy, regulatory relief, and defense spending.
The larger reality is that very quickly in his administration he will be reacting to real world events that he is uniquely unqualified to resolve. Unfriendly nations throughout the world are undoubtedly strategising right now about how to use his inexperience and character flaws to advance their interests.
One very likely scenario I can imagine is a terrorist attack planned in such a way as to be personally embarrassing to Trump. I can easily see him overreacting against Muslims in general, which of course is exactly what the terrorists will want him to do. Given how Trump has empowered racists throughout the country, it may not even be his overreaction, but those of his followers, that would cause the most damage.
Whether or not this specific scenario should arise, my concern is much more about how aspects
of his personality and his limited experience, combined with a sense of infallibility arising from a truly remarkable electoral victory, can lead to decisions that will deeply destabilize America.
“Whether or not this specific scenario should arise, my concern is much more about how aspects
of his personality and his limited experience, combined with a sense of infallibility arising from a truly remarkable electoral victory, can lead to decisions that will deeply destabilize America.”
…Kinda sounds like a post mortem on the Obama reign…
Ah, the “I’m rubber, you’re glue” argument. Haven’t heard that one since second grade.
stansberry:
Borrowing too much doesn’t make individuals or entire economies rich. Research shows that cutting taxes (as Trump promises to do) is unlikely to deliver any lasting economic benefits if it leads to a corresponding increase in government debt.
So can Trump cut taxes without adding to the deficit? No way, not when we’re already running huge annual deficits and so much of the government’s spending (around 70%) is for transfer payments and entitlements that are “mandatory” and not part of the discretionary budget.
Nevertheless, I’m sure that for the next few months… or even a year or two… folks will hope that Trump will pull a rabbit out of his hat and bring back significant amounts of economic growth. Trust me, it won’t happen. The Republicans can’t make our $20 trillion in federal debt disappear. You can think of that gigantic problem as the Obama legacy. We’ll be paying for it for decades.
Trump may well help us economically, but I am still ashamed of his public bullying demeanor on woman, people of color, and the handicapped. I have three grandchildren and have had to explain why “that man” is allowed to say those things that my grandkids are taught to be wrong. The poor fools that think he can “bring manufacturing jobs back” due to trade machinations are just that: fools. We are losing jobs primarily due to the technology revolution and its still in the early stages of job killing….The uneducated or untrained in modern technology will continue to fall farther and farther behind….
Get over it. Elections have consequences. Hillary, who was a terrible choice and who ran a terrible campaign, lost. Donald Trump won. Time to move forward. You’ll have another chance in 4 years. Hopefully the Democrats will put up a much better candidate. The sun will rise in the morning and set in the evening. The sky is not falling.
2 years, and I hope you are right about the sky, for all of our sake.