How I’m Trading The Trump Presidency…
Value vs Growth Stocks
President Trump’s second term thus far has been… rocky. The ups and downs of the stock market directly correlate to the ebbs and flows of ever-changing geopolitical plans and trade policy. Corporate America has coined the term “Sunday scaries” to characterize the end of the weekend, and dread of the upcoming work week; investors have recently experienced the “Friday scaries” – as we all anxiously await the weekend bombshells that pour out of our nation’s capital.
Amidst such a historically raucous administration at the helm, growth stocks have been feast or famine – albeit the latter playing victor until recently. Despite my typical support in the growth sectors (specifically tech), I have found myself leaning more towards value. Simply put, because President Trump can’t take away value…
If the first months of this administration have taught you nothing else, you should hopefully recognize that companies with ties (in both supply and demand) with foreign bodies (bonus points for China) have become a disproportionately risky investment. Unfortunately for the tech sector, this applies to almost every company under the sun. Most hardware infrastructure companies rely on foreign backing, most software application companies have major markets in Europe, consumer-facing tech companies have major global streams, and most importantly – semiconductors are almost exclusively made and manufactured in China and Taiwan. Since January 20th, global appeal has flipped from a revenue-backed tailwind to a toll-enforced headwind. As I limit geopolitical exposure in my own portfolio, I’m looking into value names. Companies like Visa, Berkshire Hathaway, Novo Nordisk, and high-dividend ETFs like BTCI are topping my buy list. Of course, I’m still buying my favorite tech companies like Amazon, Hims, Fortient, and Google, but not only is their ceiling capped by the current administration, but their floor is almost nonexistent.
As I mentioned earlier, Trump can’t take away value. He can shut down international trade and put 200% tariffs directly on chip design, but he can’t change the fact that Pfizer is trading at a forward PE ratio of 8.36 with a dividend yield of 7.32%. After decades of growth running the stock market, I believe this stint of Trump’s second term will bring investors back to good old value. Palantir trading 104X sales (especially when the administration is supposedly cutting back their spending) doesn’t seem like much of a sure thing anymore… but Visa making huge revenues on fees from credit card transactions is a nearly impenetrable fortress of cash flow.
As I move further away from typical growth names, here are ten value stocks I’m looking to own, and what prices I’d consider a fair buying opportunity…
Visa Inc. (V) | $330/share.
Goldman Sachs Group Inc. (GS) | $565/share.
Novo Nordisk (NVO) | $80/share.
Pfizer Inc. (PFE) | $23/share.
Home Depot Inc. (HD) | $360/share.
Starbucks Corp. (SBUX) | $90/share.
Exxon Mobil Corp. (XOM) | $105/share.
Bank of America Corp. (BAC) | $42/share.
Berkshire Hathaway Inc. (BRK.B) | $485/share.
Johnson & Johnson (JNJ) | $150/share.
*None of this newsletter and/or any subsequent content pieces are financial advice. This newsletter and/or any subsequent content pieces are all intended for entertainment and educational purposes only. Please invest wisely under your own accord.*