Trump 2.0: Is Your Portfolio Ready?
This is a must-read issue...
Before we get started, I wanted to let you know the new episode of my podcast Room to Run is live on Spotify and Apple Podcasts.
In this week’s episode we discussed:
My reaction to last week’s monumental stock and crypto rally
Review what I bought last week and what I plan to buy in the near future
My outlook for the crypto market with Bitcoin at $80,000
Preview of next week’s market moving events
Each 10-minute episode can be listened to for FREE on Spotify and Apple Podcasts. If you enjoy the podcast, please leave a review.
It looks like Stanley Druckenmiller was right.
The hedge fund legend went on national TV in October to say markets were pricing in a Trump victory.
While many people - particularly on the Left - ignored his forecast, they would’ve been wise to listen. As everyone now knows, last week the American electorate issued a complete rebuke of the Democrat platform as they lost the Senate, House, electoral college, and popular vote. That’s in addition to a state governor majority and state legislature majority.
It was an absolute and utter defeat in every sense of the word. But Druckenmiller sniffed this out before the polls, citing rallies in Bitcoin, financials, and even Trump’s Truth Social (DJT) shares are reasons why the market was leaning Trump.
And he wasn’t the only one to call this; me and our 1,000 TikStocks Portfolio members were nearly perfectly positioned to profit from this rally, as we were long crypto, financials, and big tech prior to the election.
But while I’m obviously happy about our positioning and all the money we made, it’s in the past.
And what comes next is far more important.
What Happened on Election Night
The moment betting markets like Polymarket and Kalshi went parabolic in favor of Trump at 10:30 EST on Tuesday night, we saw the Trump Trade go into action.
And it was very similar to the playbook I outlined last week. First, Bitcoin rallied to new all-time highs, which I was happy to see since it’s my second largest portfolio position.
Then Dogecoin followed suit. This made sense since Elon Musk - one of Dogecoin’s largest promoters - is very close with the Trump campaign and may even serve in his administration.
Then stock futures started to rise, with the Nasdaq having its second best day of the year on Wednesday:
These were exactly the trades I outlined last week in my 2024 Election Playbook. And it makes as much logical sense now as it did last week.
Trump has said he wants to cut regulations in the banking sector, which will directly raise earnings. He’s also made inroads with the crypto community, going as far as to issue his own NFTs during the campaign.
And since he’d likely kick Lina Khan out of the Federal Trade Commission, we’d likely see a rally in big tech which has seen nearly every merger blocked over the last four years.
Both me and our 1,000 TikStocks community members were thrilled to see this. In fact, I had my best day of the year on Wednesday as I had heavy allocations to tech, crypto, and financials.
But what comes next is even more important.
Keeping a Close Eye on Sentiment
Anyone who’s read my work knows I pay close attention to market sentiment.
And my sentiment spidey-sense is starting to go off. For instance, after Wednesday’s monster rally where the Nasdaq finished the day up over 3%, my phone wouldn’t stop buzzing. Many of these messages were from our Discord community, all of which were thrilled they were positioned so well going into Election Day.
But I was also getting messages from people in my personal life, with all of them looking to put money to work in the markets.
And that is important. Many people were waiting until after the election to put their cash into stock and crypto markets. After the Red Wave and subsequent rally, the pressure to chase the market higher was palpable.
Everyone was asking if it was still a good time to buy, and to that I said it depends on your time horizon.
I’ve been consistent in my view that we are in a secular bull market that will likely last many more years. This is fueled by the massive global liquidity boom we’re experiencing as central banks around the world lower interest rates in unison. But it’s also due to the productivity - and subsequent earnings growth - we’re seeing thanks to AI.
But in the near-term, it’s best to exercise some caution. For me, I did not buy any stocks or crypto last week. This was thanks to my positioning going into the election, as me and our 1,000 community members made a ton of money by being nearly perfectly positioned to profit from this rally. If anything, I am raising my stop losses here to lock-in gains on speculative positions, not adding to positions.
Because as the great Jesse Livermore said over 100 years ago, “I made most of my money by just sitting.”
That is exactly what I’m doing now, in addition to exercising patience. Because again, I think stocks go much higher from here over the next year. And if that’s your time horizon, I think it’s fine to add to high-quality positions (you can see my full portfolio here).
But for those of us who nailed this post-election trade, I would follow my lead and exercise the rarest commodity on Wall Street: patience.
Because late longs get punished in markets like this.
Stay safe out there,
Robert