13 OCTOBER 2020

The Trump vs Biden battles are heating up. The US 2020 elections are just a month away. Every time the polls change in a candidate’s favor, the markets react.

Usually, when the results turn in Trump’s favor, the markets react positively. The pro-business Republican bias still permeates Wall Street’s psyche.

Stock Market Election Polls Comic

How Democrats see the market. Vice versa for Republicans.

Although in recent times, the markets react positively to Biden rising in the polls as well.

While Trump is more pro-business, it seems Wall Street is valuing monetary policy more than fiscal and foreign policy. Both candidates are serial money printers, with the Democrats having the bigger printer.

And it appears the markets prefer higher inflation than inflation!

No matter who wins, we are going to get inflation. The only difference is what the winning candidate will spend it on.

Wealth Transfer Comic

With Trump, we’re going to get more spending in military, agricultural and infrastructure projects.

With Biden, we’re going to get more spending in entitlement programs and Green New Deal projects.

So which president should we optimize our portfolio for?

Trump vs Biden: business investors shouldn’t care

Frankly, if you’re trying to invest based on which candidate is going to win, you’re not investing, you’re gambling.

While I think Trump has the edge, there isn’t enough information to know for sure who will win. Realistically speaking, the probabilities are 50-50 or 60-40 for both candidates.

Such odds are no better than playing roulette at the casino.

What are you going to do when solar stocks take a 20% dump if Trump wins? What are you going to do when Exxon takes a 20% dump when Biden wins?

Don’t put yourself in a losing situation. Betting on elections is not a long-term strategy for success.

As a value investor/speculator, the elections shouldn’t have a heavy effect on your investments. Great businesses will do well regardless of the election results over the long-term.

Those are the kind investments we should invest in: great businesses, not stocks. Invest in businesses that are fundamentally positioned to provide value and growth. Not a ticker symbol with promises and fluff marketing.

An idea that will do well no matter who wins

I believe it’s best to buy stocks that will do well no matter who wins.

Heads, you win. Tails, you win.

One idea is uranium.

If there was one sector that I could buy and forget about for five years and come out ahead, it would be uranium.

On the demand side, China and other developing nations need more uranium to power their reactors. The US imports most of the uranium their military and utilities use. With growing anti-globalization attitudes, domestic uranium production in the West is also set to increase.

On the supply side, the uranium price is too low for miners to make a profit. As a result, miners are not producing enough uranium and a supply deficit is fast coming.

In order to incentivize production, the uranium price must go up or the lights will go out.

A uranium bull market is a when, not if situation. And when it happens, it’s not rare to see stocks return 10x plus. Uranium is one of the most asymmetric plays right now with great business and macro fundamentals.

Neither Biden nor Trump can stop the world’s need for nuclear energy. In fact, they both endorse it. It’s well known the Republicans were never anti-nuclear, but the Democrats were. However, that sentiment recently changed when Biden and Harris put forward a “green energy plan” that involves the use of nuclear energy.

Trump, you win. Biden, you win.

Hot off the press!

I wrote this article to warn investors not to tailor their stock picks to a specific candidate and to promote my most recent investment report.

This one’s all about the uranium sector: everything from a brief history of the commodity to how the nuclear energy industry works. I also include a stock idea in the report.

I plan to follow-up with some shorter reports on junior miners. They are speculative and the risk is higher, but the return potential is greatly skewed to the upside.

If you’re interested, join my readers and enjoy the ride up!  

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