Dear Reader,
Happy Friday! T.G.I.F.
Today I want to talk about the stock market (which is what we do here, but)…
A lot of folks have compared Trump’s win to Reagan’s big win in 1980.
And there’s a lot of valid comparisons there – in many ways I agree.
Especially, the relationship between the government and the people seems very likely to change – and that’s probably a good thing, God-willing.
But the stock market itself as I’ve been saying for about five months now, offers a few warning signs.
I’ve been saying we’re in a bubble, and that bubble’s just been made worse by this “Trump bump” that really popped the market up. I’ll get to that in a minute.
But I want to talk about Reagan.
I dug up some old data to find out just what was happening during the leadup to the Reagan-Carter presidential contest and what the market did afterwards.
And there are some very interesting parallels here that I wanted to share with you (for those of you who like to geek out on this stuff like I do).
In 1980, during the election year, the stock market (and I didn’t even know this) went up 29%.
Very similar to the market we’ve had this year, which is up 33%.
And the stock market also jumped when Reagan won the presidency – it jumped 3% just like the market has jumped after Trump.
What I do remember that a lot of people seem to forget, is that the first 18 months of Reagan’s presidency, stocks entered a bear market that dragged the S&P 500 down 29% as a recession hit the United States.
And that was despite the fact that the market had a P/E ratio of 7.5.
Can you imagine the stock market with a P/E ratio of 7.5?
Right now our stock market has a P/E ratio of at least 27, and our market cap to GDP is over 200%! (That goes back to the “Buffett Indicator” we’ve talked about.)
So it’s really crazy.
Now, one of the other things I want to talk about is, a lot of folks are saying that the market’s 4% jump since Trump was elected is a sign of things to come…
That it’s telling you what’s going to happen.
That’s not necessarily true.
So, why has the market jumped up, besides just a lighter regulatory environment?
Basically, Trump has said that he wants to lower the corporate tax rate by four percentage points.
That basically means profits will go up in all of these companies by the amount he lowers the corporate tax rate.
That goes right to the bottom line of all these companies.
So of course the market jumped by 4%.
Now, it should go up even a little premium above that tax savings amount.
The bottom line is – there’s no doubt about it – that’s going to be good for business.
Lowering the tax rate alone brings profits right to the bottom line, which means higher earnings, expansion, and will push the stock market a little bit higher.
So that’s very positive.
Companies will earn more money.
They’ll be able to invest more in growing their businesses.
They’ll be able to buy back stock, make acquisitions and do all these wonderful things.
And I think actually one of the biggest winners of Trump’s presidency will be what happens in mergers and acquisitions – in a word, takeovers.
And of course you know we’ve done very well with these in our service Takeover Targets.
We’ve had a near-100% win-rate since January 2020 – almost five years running.
And the best news is, we’ve done it through up markets, down markets, Biden, it didn’t even matter.
We’re just bobbing and weaving in Takeover Targets.
So now, I don’t want to be a Debbie Downer and rain on anybody’s parade – I just wanted to bring you inside my mind to show you the bigger picture, take you behind the markets.
And show you what’s going on here and why it pays not to drink the Kool-Aid.
Be patient.
Watch the risks.
Take measured approaches – measured bets.
Let’s not lose our heads – don’t get caught up in the hype.
Let young people, or uneducated people do that – people who don’t know history – don’t have experience.
We can’t afford to do that.
This is the benefit of age – we trade the beauty of our youth for a little bit of wisdom.
So that’s where I’m coming from today.
I’m just trying to share some of my experience (most of it has been painfully earned!).
So, as I’ve been saying – don’t get caught up in the hype – keep a cool head. Remember Reagan.
And no matter what happens, I believe this Trump presidency will be absolutely phenomenal for Takeover Targets readers.
So I wanted to briefly re-open my webinar on “Our #1 Takeover Target for November.”
It’s hit such a sweet price and its recent earnings announcement and trial results look great.
I highly recommend you check it out before it’s too late.
Just go here to get “Our #1 Takeover Target for November.”
“The Buck Stops Here,”
P.S. Billionaire investors and insiders who specialize in biotech investing have been buying massive amounts of this stock.
That’s why this opportunity is so urgent.
And that’s why I went live for the first time in almost five years tell you about it.
Click here now to get, “Our No. 1 Takeover Target for November.”
