Sectors Durable Under Either President and Trump News Network Coming
‘Strap yourself in and keep your hands in the vehicle.’ So said a trader mate of mine a week or so before the election.
His custom-made algorithm saw a period of high-risk and unpredictability.
My bias was to assume the risk was to the downside. As usual, the market couldn’t care less what I think or feel and does what it wants.
Did anyone expect the market to rip higher like this?
I’m sure there was, but I didn’t hear from them. That’s OK.
I’ve been buying and recommending stocks regardless of that nagging sense that the market might fall from underneath us.
And those concerns were legitimate, by the way.
It was only the other week that I mentioned the small-cap sector was beginning to feel shaky, or, as another trader quipped, ‘sketchy’.
But not now. The futures market is up big so we’re in for some heady action today.
Perhaps the current environment is testament to the fact that you must be prepared to shift with the wind as it blows in the market. Or you run the risk of getting blown away, either way.
It’s also why it’s vital that all of us must constantly be listening to a diversity of opinion on any sector or directional view.
Experience can count for a lot in the market, but surprise — and loss — can come just as easily to those with 20 years under their belt or those with two.
Whither stocks now? Supposedly we’re ripping higher because of a Biden win and the timely news of a COVID vaccine.
Lost amongst this is that this vaccine is rushed out the door faster than a stabbed rat.
It also presumes there won’t be pushback by a populace that no longer trusts the mainstream media or the government and their corporate paymasters.
After all, 500,000 Australians signed a petition for a royal commission into Rupert Murdoch’s media empire. News Corp controls two-thirds of daily newspaper circulation.
I can’t help feel this is yesterday’s war. The newspaper business is just about finished. It’s the creepy power of Google, Twitter and Big Tech in general where the real war lies.
They have enormous power to censor discordant or dissident views. And even when they aren’t overtly doing this, they can shape perception and values with what they choose to present to their users.
That’s why the stage is set for the Trump Network to go live if the current president does fail in his court bid to hold the office. The 70 million who voted for him will make an immediate audience.
Trump rose to power by not being a standard politician with their empty words and platitudes. He can reshape the media in the same way.
You might not like what he says, or how he says it, but you can’t deny him his due in one respect: he’s not the usual political weasel.
That’s a part of his appeal that will translate to television with ease.
Most politicians are boring, middle-aged white men preoccupied with their image and ‘media relations’. Trump is never boring, at least.
For now, however, in the stock market at least, it’s the Biden show. Lithium stocks are rallying as the president-elect’s green ambitions come closer to being realised. Nickel and copper stocks aren’t looking too shabby either.
Keep an Eye on the Property Market
The worrywart in my brain says these could reverse badly if Trump’s bid to use the Supreme Court works. Therefore, my bias is to find stocks in a sector durable under either president.
That’s the housing sector. The government and the RBA have thrown everything at this sector and it’s working.
You only have to see the price action in REA Group Ltd [ASX:REA] and Domain Holdings Australia Ltd [ASX:DHG], to see the bullish signal here. REA is around all-time highs.
Not bad considering it was only a few months ago the housing bears were back and drooling. Oh dear, I guess Martin North will be wrong again this year.
Do yourself a favour: If you want to know what’s coming in real estate, make sure you’re getting the latest analysis from my colleague Catherine Cashmore.
Catherine is one of Australia’s most knowledgeable property analysts. She went on record in February and March to say 2020 was throwing up the buy of a lifetime in property because of the COVID scare.
You play this in the property market or equities. I just mentioned REA Group and Domain. But there are so many more ideas here.
Editor, The Daily Reckoning Australia
PS: Australian real estate expert, Catherine Cashmore, reveals why she thinks we could see the biggest property boom of our lifetimes — over the next five years. Click here to learn more.