We've had a pretty good idea for months now of who would be on the Democrats' and Republicans' 2020 presidential election tickets.
And now that the conventions are sewn up – or, in the case of the Republicans, soon will be – we can turn our attention to the "home stretch."
Now, I'm not here because I'm backing a candidate. While I certainly have my opinions, and you have yours, I'm not here to talk politics or handicap the election. That's a job best left to the talking heads – they're welcome to it, I say.
Rather, from where I'm sitting in the markets, the home stretch is the time when the opportunities and pitfalls of either outcome come into focus. That's what I'm excited about.
And yes, while both parties are predicting doom and destruction should the other side win, the truth is there will be plenty – tons – of moneymaking opportunities after the election.
They're going to be different opportunities, and will require different approaches and positioning, but – mark my words – they will be there. That's what I'm breaking down for you here today to make sure you'll be prepared to profit from either scenario…
Four More Years of President Trump? Buy This, Not That…
The Trump administration is something of a known quantity on Wall Street and C-suites around the world. In other words, should he be reelected, there will already be a "roadmap" of sorts – a path of least resistance that stocks can take to rally higher.
Should the president's party keep the Senate and gain control of the House – an admitted longshot – a fully Republican runway will lead to a blend of lower taxes, more deregulation, and across-the-board business support. That's a heady brew for stocks.
Even if the Democrats keep the House, we'd end up with the exact same playbook business has been following for the past three years. The push higher might not be as fast or as steep, or even as long-lived, because there'd be a "hard check" on bullish Republican policies.
That said, it looks like the latter scenario is at least somewhat more likely, and there's at least a chance Democrats will take the Senate, leading to what's known as "divided government."
But, as I said, opportunities abound. Under this scenario, I still like the defense sector, as exemplified by Lockheed Martin Corp. (NYSE: LMT). For most of the past 20 years, defense budgets as a share of GDP have risen under Democrat and Republican administrations; defense contractors employ plenty of people in "blue" constituencies.
And while it's true that defense spending declined somewhat between 2011 and 2017, the overall decline was way less than $100 billion. You can look for that spend to increase again and again under Trump II.
Energy stocks like Exxon Mobil Corp. (NYSE: XOM) will rocket with more solid government support. We could see fossil fuels come roaring back in a big, big way. On the other side of the coin, "green" energy stocks could see quite a lot of wind come out of their sails.
Trump's delivered on two of his big 2016 platform planks: lower taxes and deregulation. Infrastructure spending is still hanging out there, and it's a safe bet he'll chase it with gusto should he still live in the White House on Jan. 20, 2021. The play here – which everyone should buy today, even before the election – is Summit Materials Inc. (NYSE: SUM).
Summit supplies building materials, specifically asphalt, cement, and ready-mix concrete, to clients up and down the construction industry. The company boosts its robust materials business lines with services like paving and trucking. This company could be at the nexus of an explosion of infrastructure spending this year and next.
In fact, I even like Summit in the event of this other possibility – and I'll tell you why…
Hello President Biden? Buy This, Not That…
Infrastructure spending will in all likelihood be a priority even if the Democrats sweep Washington, and the prospects for that may very well be even better if the Executive and Legislative branches go "blue" and spending goes full speed ahead.
Take the "Green New Deal," for instance. Much ideological, partisan hay has been made over it, but "greening" – while it may very well crush oil companies – would clearly be great news for several stocks, particularly Brookfield Renewable Partners LP (NYSE: BEP). Brookfield owns a portfolio of 5,301 renewable power generation facilities, good for about 19,000 megawatts of power in just about every corner of the world. Brookfield would be ideally positioned to profit from even a token government nod to renewable power.
Likewise, electric vehicle makers would find their stocks on the upswing. Tesla Inc. (NASDAQ: TSLA) has recently cemented its status as a dynamite investment and top-tier company, but chasing it higher from these levels could be foolhardy.
However… a hypothetical future Biden administration's "green" tax credits and incentives would open up the way to even more growth there, and particularly in Nikola Corp. (NASDAQ: NKLA). Nikola (as in Nikola Tesla, get it?) is a hydrogen-powered truck manufacturer that's right up there with Tesla in terms of investor interest.
And of course there are cannabis stocks, which have done well under Republicans, who are traditionally cool toward marijuana. A Biden 2020 victory would be like rocket fuel for companies like Canopy Growth Corp. (NYSE: CGC). A huge segment of the Biden coalition backs full and complete marijuana legalization, and the Biden administration just might give it to them. Canopy is a leader in recreational and medicinal cannabis products in the United States, Canada, Germany, and the United Kingdom.
Interestingly, the three "Biden victory" stocks I've recommended here are all well below 52-week highs, giving them plenty of room to run higher – a lot higher, should Biden take the White House.
The bottom line is, no matter what happens, savvy investors who are aware of the opportunities I just mentioned will do just fine, no matter the outcome in November.
But here's the thing…
I've Got Even More Stocks to Tell You About Right Now
My team and I made a whole "lightning round" video of "Buy This, Not That" stocks – which 50 firms are the real McCoy, and which could very well sink your profit potential. There are some big names here, but also some that I think could surprise you.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.