MW This investor's Trump basket is up 87% since March. Here's what he likes now.
By Steve Goldstein
Tax policy and regulatory overhang are the places to look now, says Citrini Research
This is not necessarily the best post-election move ever in stocks - more on that later - but it sure is pretty dramatic.
One investor who was well prepared was James van Geelen, the founder of Citrini Research. His Trump basket jumped 87% from March to Nov. 8, and a market-neutral Trump basket rose 32% during that timeframe.
In an interview with Jack Farley's Monetary Matters Network, van Geelen said his basket differentiated itself from some of the sell-side equivalents because he was not restricted by a bank's research coverage. And he said one value of his basket was the signal it provided, which provided an insight independent of the betting markets and led them ahead of the election.
The basket included mortgage guarantee companies Fannie Mae (FNMA) and Freddie Mac (FMCC) on privatization hopes, Geo Group $(GEO)$ and CoreCivic $(CXW)$ on the immigrant detention view, and long European defense companies and short their U.S. rivals on the view European countries would be pressured into spending more on defense. The basket was short Dick's Sporting Goods $(DKS)$ on both its exposure to tariffs and the view that guns wouldn't get a boost from a Trump election.
The basket also was long capital-markets plays including Jefferies Financial Group $(JEF)$, Evercore $(EVR.UK)$, Carlyle Group $(CG)$ and Piper Sandler $(PIPR)$.
Currently he's looking at creating baskets that will work now. "The two areas we're looking at is tax policy and regulatory overhang," van Geelen said. "What is every single company that [Federal Trade Commission Chair] Lina Khan has ever spoken negatively about - you probably want to be long all of those."
He extended that analysis to other regulators. "If Trump gets Gary Gensler out [of the Securities and Exchange Commission], Coinbase $(COIN)$ is probably going to do pretty well," he said.
Van Geelen is a little less worried about the deficit under Trump than others, for factors including the likely selection of hedge-fund trader and George Soros acolyte Scott Bessent as Treasury secretary. "The move in the long bond seems a little overdone to me because it's reflecting a fiscal outlook that might be skewed or too colored by the federal government's response to Covid, and also probably takes too rosy of an outlook on which of Trump's promises he will actually keep."
He also bought the dip in Chinese equities. "I highly doubt we're going to see a blanket 60% tariff," he said.
A novel way of playing Trump's desire for more drilling is to buy companies that treat the water the fracking companies unearth when they hunt for oil and gas, mentioning Texas Pacific Land $(TPL)$, Aris Water Solutions $(ARIS)$, Energy Services of America $(ESOA)$, Kinetik Holdings $(KNTK)$, and Arq $(ARQ)$.
The market
U.S. stock futures (ES00) (NQ00) slipped. The action in bitcoin (BTCUSD) was wild, with the cryptocurrency nearly hitting $90,000 before tumbling below $86,000. The yield on the 10-year Treasury BX:TMUBMUSD10Y rose as the bond market reopened after Veterans Day.
Key asset performance Last 5d 1m YTD 1y S&P 500 6001.35 5.05% 2.41% 25.82% 36.04% Nasdaq Composite 19,298.76 6.15% 4.30% 28.56% 40.17% 10-year Treasury 4.362 7.30 25.70 48.11 -27.39 Gold 2602.4 -5.22% -2.38% 25.61% 33.44% Oil 68.55 -4.38% -4.62% -3.90% -12.69% Data: MarketWatch. Treasury yields change expressed in basis points
The buzz
The Wall Street Journal reported that Trump is expected to nominate Sen. Marco Rubio to be secretary of state as he named a China hawk, Rep. Mike Waltz, as White House national security adviser.
Home Depot $(HD)$ beat earnings expectations for the third quarter.
Live Nation Entertainment stock (LYV) rallied as the Ticketmaster parent reported stronger-than-expected earnings.
The Fed's senior loan officer survey is due for release.
Best of the web
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Donald Trump Jr. to join a venture capital company investing in anti-woke companies.
The chart
Bloomberg columnist John Authers put together this chart showing that the Dow responded just as enthusiastically to the election of Herbert Hoover, who presided over the Great Depression. "A primitive overlay chart is no kind of evidence that the stock market is destined for a crash like 1929. The point is that the post-election rally doesn't prove anything either way," he says.
The tweet
As far as calls go - NBA legend Scottie Pippen was less than a week away from being proved correct with his dream-inspired bitcoin price call. In an interview conducted Monday, Pippen also claims to have met Satoshi Nakamoto, who invented bitcoin and whose identity has otherwise proved to be elusive.
Top tickers
Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern.
Ticker Security name TSLA Tesla GME GameStop NVDA Nvidia MSTR MicroStrategy PLTR Palantir Technologies DJT Trump Media & Technologies TSM Taiwan Semiconductor Manufacturing COIN Coinbase Global AMC AMC Entertainment MARA Mara Holdings
Random reads
Dolls whose packaging erroneously linked to a porn site are now being resold online for over $100.
Nearly two decades after being stolen, The Wizard of Oz ruby slippers are up for auction.
A 77-year-old slice of cake from Queen Elizabeth II's wedding to Prince Philip was auctioned for $2,800.
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-Steve Goldstein
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November 12, 2024 06:29 ET (11:29 GMT)
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