Believe In America (Part I)

November 17, 2016 12:16 AM


“The improbable is now possible!!!”

That is the last coherent sentence I remember a friend uttering on election night, as I finished off a flight of beers before switching to endless bottles of champagne. I then spent the better part of the next 36 hours roaming the streets of South Beach, yelling “FREEDOM!!” until my voice gave out and buying drinks for anyone who claimed to have voted for Trump. Over 2 nights and a day, I visited almost every watering hole on the beach, sprayed champagne on friends and celebrated America’s future.

I didn’t live through World War II, but I assume that victory celebration was equally epic. America has once again been saved by its citizens. Never before, or since, has something this serious been this close. We all dodged a meteorite with inches to spare. We now have a modernizer in office, controlling all three wings of the government, intent on fixing America. Only a few days ago, America’s future mostly resembled Venezuela’s. My outlook had been bleak and sour. Now we will once again be the America we have been missing out on for the past few decades (literally my entire life). The shackles will now come off and we will be allowed to flourish. Americans have become so numb to the idea that things can change for the better, that the coming prosperity will genuinely surprise people.

We’ve been mired in a no-growth economy for two decades—what happens when we hit 5% GDP growth?

We’ve been fighting “deflation”—what happens when demand comes back?

We’ve exported millions of jobs over the past two decades—what happens when there is genuine wage growth for all Americans?

Taxes have suppressed business. I cannot even fathom a 15% corporate tax rate here in America—what happens when it’s more efficient to run a business here, than offshore it?

Obamacare has destroyed jobs, strangled businesses and held America back—what happens when we’re freed of it?

Regulations have made small business too complicated to bother with—what happens when the American spirit is let loose to build?

I can go on and on. There is dramatic change coming. One of the ironies of the most recent election is that there was so little substance to the actual campaign. “She’s corrupt.” “He’s sexist.” The debates rarely got much further. What does Trump really stand for? No one is sure. I think this creates huge opportunity for those of us who can figure it out first. Sure; more infrastructure, less regulation, lower taxes, better relations with the international community, but I want companies that benefit—not bland pronouncements.

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As I sobered up this weekend and chatted with my smartest friends, I have set about trying to discern what will happen. There are going to be huge winners and quite a few losers in Trump’s America. If you can figure it out before it happens, fortunes can be made. Over the next few pieces, I will tell you about some of those winners and losers. I promise—no more politics.

For starters, my whole outlook as an investor has changed dramatically for the better. Before the election, all asset classes moved in unison to Central Bank printing. Now policy changes will bring back prosperity—the Central Bankers will matter less. For most of the past 6 years, I’ve owned gold, sat in cash, ventured overseas and waited for an apocalypse in order to buy bargains. Now, I want to own small American companies that are about to prosper like never before. Gold? I’ve owned it for over a decade. I’m not selling, but certainly not buying more. It’s a hedge that has become rather unnecessary as economic growth takes off. Sure, there will be some inflation, but I want to own stuff with returns on capital. I want to own stuff that is about to grow rapidly. I’m excited; I get to be an investor again and I’m in a country that suddenly has a very bright future.

Despite not being a fan of Trump, the individual, I suspect that he ends up being the best president in almost a century. For 18 months, everyone has underestimated him. They’re still underestimating what he can accomplish. Big picture, he gets it. Sometimes, it takes a jerk to solve problems. Buckle up; the next 4 years are going to be YUUUUUGGGEEEE for investors who believe in America.

 

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