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'Trump Trades': Sell Your Gun, Oil Stocks If the Donald Wins White House

'Trump Trades': Sell Your Gun, Oil Stocks If the Donald Wins White House

(Getty/Dennis Flaherty)

By    |   Thursday, 13 October 2016 01:17 PM


If Donald Trump defeats Hillary Clinton in the most contentious presidential election in modern times, how should a savvy investor prepare for the next four years?

“Investors would be wise to consider what a Trump presidency would mean for their portfolios, devising trade ideas based on his policy proposals. Granted, Trump’s statements during the campaign are often vague, contradictory, or of dubious legality,” Quartz reported.

“Still, campaigns traditionally offer a pretty accurate preview of how presidents govern—Politifact says that 70% of Barack Obama’s campaign promises have been kept, in some form,” Quartz reported.

Highlighting six of the site’s nearly dozen “Trump Trades”:


  • Short the Mexican peso and go long the Russian ruble. “This is the ultimate Trump trade, taking advantage of two of the candidate’ most vocal policies. Trump plans to build a wall along the Mexican border, deport all undocumented immigrants, and scrap NAFTA. Trump has showered praise on Russian president Vladimir Putin, suggesting that he could ease up on the Western sanctions that have been weighing on the Russian economy,” Quartz reported.
  • Buy pharmaceutical companies. “Companies such as Mylan, Valeant, and Turing saw their share prices tumble when Hillary Clinton accused them of ‘predatory pricing.’ Trump doesn’t seem to share similar concerns, and so the pressure on drugmakers to lower prices on popular medicines could be lifted,” Quartz reported.
  • Buy private prison companies. “The shares of private prison operators collapsed earlier this year, after the US Justice Department said it would stop using for-profit prisons for federal inmates. If Trump wins, it could be time to snap up a bargain. Trump’s government may need the extra space—his plan is to deport all 11 million undocumented immigrants, and the largest immigration detention centers in America are run by these companies,” Quartz reported.
  • Sell gun stocks. "A Trump presidency could be bad news for gun companies, at least in the short term. Fears of stricter gun-control laws have traditionally sparked a surge in gun sales, like after Obama’s electoral wins in 2008 and 2012. Their share prices could suffer if investors aren’t as nervous about changes to the law under Trump," Quartz reported.
  • Dump oil companies.  Trump’s willingness to deregulate energy exploration and encourage more domestic production could backfire for oil-company stocks, according to Andy Goldberg at JPMorgan Asset Management:
  • Stockpile gold. "It is an understatement to say that Trump is an unconventional presidential candidate. This alone is enough to sow uncertainty about the fate of the US economy during his administration. Given that he’s trailing in the polls, a Trump win is underpriced by the markets—if, against the odds, he pulls off a victory, traders’ first instinct may be to scramble into this traditional haven asset," Quartz reported.


Meanwhile, one of the most beloved investors of our generation has said it actually doesn't matter who wins the White House this time around. The American economy will thrive and survive.

Investment icon Warren Buffett has bemoaned the "negative drumbeat" on the U.S. economy from presidential candidates in his annual Berkshire Hathaway Inc. shareholder letter earlier this year, saying they are misleading Americans into believing their children will be worse off than they are, Reuters reported.

"It's an election year, and candidates can't stop speaking about our country's problems (which, of course, only they can solve)," Buffett wrote, italicizing "they" for emphasis.

As a result of their dour outlook on the U.S. economy, many Americans now believe that their children will not live as prosperously as they themselves do, the 85-year-old Buffett said.

"That view is dead wrong: The babies being born in America today are the luckiest crop in history," Buffett said. 



“If either Donald Trump or Hillary Clinton becomes president, and one of them is very likely to be, I think Berkshire will continue to do fine,” Buffett, 85, said at this year's annual shareholders meeting in Omaha, Nebraska.

“Twenty years from now, there’ll be far more output per capita in the United States in real terms than there is now. In 50 years, it’ll be far more,” Buffett said. “No presidential candidate or president is going to end that. They can shape it in ways that are good or bad, but they can’t end it.”

(Newsmax wire services contributed to this report).

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If Donald Trump defeats Hillary Clinton in the most contentious presidential election in modern times, how should a savvy investor prepare for the next four years?
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Thursday, 13 October 2016 01:17 PM
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