Why ‘Trump Hate’ Is Bullish For the U.S. Economy

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

Eight years ago, I compared the election of Barack Obama as U.S. president to the political equivalent of the dot-com boom. An unprecedented mania swept into office an untested 47-year-old neophyte, whose mere presence in the White House would bring peace and prosperity to the planet.

The contrast with today could not be greater. The impending Trump presidency is giving the media, academia and Hollywood an apoplectic fit.

Attendees at American Economics Association’s annual meeting this week uniformly condemned Trump’s economic policies. Hollywood stars are using awards ceremonies to denounce Trump.

Hate for Trump is even making for some odd ideological bedfellows. It is hard to say who despises Trump more — the conservative columnist George Will or the left wing liberal economist Paul Krugman.

No matter what Donald Trump says or does, it is dismissed as the ramblings of a racist, anti-democratic lunatic. The same also applies to anyone who does not board the anti-Trump bandwagon.

Just look at the way former Harvard University President and Treasury Secretary Larry Summers gratuitously patronizes Fox Business’ Maria Bartiromo as a closet Trump supporter at minute 6 through 7 of this video, while completely ignoring the substance of her argument.

To coin a phrase with a tip of the hat to the unlikely duo of Shakespeare and economist Thomas Sowell: “Hell hath no fury like the Vision of the Anointed.”

Such disdain is not unprecedented. This past weekend, I was reading Arnold Schwarzenegger’s autobiography “Total Recall.”

Schwarzenegger describes the challenges of being an immigrant, who married to a Kennedy, and worked in Hollywood as a Republican.

Exclusive  Federal Reserve Gets Hall Pass from Markets to Raise Rates

He also shared his befuddlement that no one in Hollywood can bring himself to say anything positive about the eight years of the Reagan presidency, no matter how well the economy was doing.

This also was the time when I was an undergraduate at Stanford University. I recall being genuinely puzzled by why the faculty lobbied so hard to keep the Reagan Presidential Library off of its campus.

Now I know that there is little new under the political sun.

The Stock Market’s Verdict on Trump

Not possessing Reagan’s self-deprecating “aw shucks” personal style, Trump will find even less love from the academic and Hollywood establishment than Reagan did.

What I still find stunning is how the universal condemnation by the nation’s academic, media and entertainment elites flies in the face of the collective judgment of the millions of investors in the U.S. stock market.

The U.S. stock market has hit 17 new highs since Trump’s election. It has added close to $1 trillion to its market capitalization. The Trump rally has made Trump critic and Hillary supporter Warren Buffett close to $5 billion richer. That’s more than Donald Trump’s entire net worth, according to Forbes magazine.

Gratitude, as they say, is the least heartfelt of emotions. Love or hate Trump, U.S. investors are feeling richer already.

Taking a step back, I find the skepticism surrounding the Trump presidency reassuring. Academics, the media and Hollywood are so blinded by their hate for Trump, they can’t think straight.

Here’s why I think the U.S. economy will continue to fare well under President Trump.

Exclusive  The Government-Dominated Market

First, the economic baton Obama is handing Trump much better than the one Obama got from Bush. Consumer confidence stands at its highest level since August 2001. The unemployment rate is at nine-year low. The U.S. economy is close to full employment. S&P 500 earnings are coming out of an earnings recession, and are expected to grow by double-digit percentages in 2017.

So Trump’s timing is lucky.

Second, Trump-related economic stimulus consisting of tax cuts, infrastructure spending and the repatriation of overseas earnings will further boost the U.S. economy. This will come at the cost of increasing U.S. government debt. Still, over the short term, even a sugar high will feel right.

Third, predictions from angry economists and pundits about the impact of Trump’s economic policies aren’t worth the digital ink they are printed on.

Much has been made of the parallels between Trump’s election and the June “Brexit” vote in which U.K. citizens decided to exit the European Union.

So it’s worth reviewing how wrong the experts were, yet again.

After Brexit, both the International Monetary Fund (IMF) and the Bank of England – populated by the same academic economists who are condemning Trump’s policies in the United States — predicted an instant recession in the wake of the Brexit vote.

Yet, instead, the U.K. gross domestic product (GDP) grew by 0.6% in the third quarter. Moreover, it likely increased by a similar level in Q4. Meanwhile, Britain’s blue-chip index, the FTSE 100, jumped 14% in 2016. That was a better showing than both the U.S and rival European indexes. For the coming year, Barclays, expects a 19.5% increase in British earnings per share, suggesting that the United Kingdom is a long way away from economic collapse.

Exclusive  Market Sentiment Leaves Me Bullish

The bottom line?

There is no reason to think doomsday predictions about Trump and the U.S. economy will be any more accurate. Academics and pundits will be wrong yet again.

And that’s why “Trump hate” is bullish for both the U.S. economy and the stock market.

In case you missed it, I encourage you to read my e-letter column from last week about the global landscape for investors in 2017.

Like This Article?
Now Get Nick's FREE Special Report:
Alternative Investing: Investing in Timber

Global Guru editor Nicholas Vardy reveals why investing in timber may be one of the best long-term portfolio strategies you'll find today.

Get Access to the Report, 100% FREE


img
previous article

Despite the recent jump in industrials & financial stocks since President-elect Trump’s victory on Nov. 8, the technology sector seems to have missed out. Coming out strong so far in 2017, technology is actually the largest sector in the U.S. markets and the most heavily weighted sector in the S&P. This gargantuan sector includes software, hardware & semiconductor manufacturers and service providers in the information technology, e-commerce & data management fields, just to

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen publishes 5 different investment newsletter advisories, including the award-winning Forecasts & Strategies, which has beaten the market over the last 15 years.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays. Bryan's four newsletter and trading services include:

Product Details

LEARN MORE HERE

Nicholas Vardy

A Stanford and Harvard Law graduate, Nicholas Vardy scours over 40 different global markets every day to uncover new profit opportunities for subscribers. His 3 advisories and trading services include:

Product Details

LEARN MORE HERE

Jim Woods

A 20-plus-year veteran of the markets, Jim Woods has varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor.

Product Details

LEARN MORE HERE

Bob Carlson

In Bob's monthly newsletter, Retirement Watch, he provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

Mike Turner

Mike’s financial, mathematical, computer science and engineering background serves as the foundation for his disciplined, rules-based approach to trading. Mike’s three services include:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE

DividendYieldHunter.com

Editor Tim McPartland has published Dividend Yield Hunter since 2006. His web site features three model dividend portfolios along with timely income investing alerts.

Product Details

LEARN MORE HERE