Trump secures the win

Trump secures the win
Stutman Photo By Jason Stutman
Written Saturday, July 30, 2016
A lot can happen between now and November, but from the looks of it, the next president of the United States is going to be Donald J. Trump. Like it or not, this outcome is just about set in stone. Hillary will need an absolutely miracle to win, as momentum has forcefully turned against her.

While these pages are typically reserved for market commentary, politics inevitably influence stock prices, both on benchmark and individual fronts. So let’s do our best to forget about our personal political leanings for a moment and think like intelligent and savvy investors. Let’s ask ourselves what is the most likely outcome of this presidential election as of today, because ultimately that outcome will reshuffle the market.

If you’ve been following the news this week, you know all too well the Democratic Party is falling apart. Donald Trump has taken the lead over Hillary in the general election polls for the first time since this race began. This recent overtaking is thanks in part to a post–Republican National Convention bump, but the real damage has been dealt by what’s been an absolute dumpster fire of a Democratic Convention.

Let’s look at it all piece by piece. You can’t make this stuff up.

WikiLeaks Reveals Rigged System

Last week, WikiLeaks released tens of thousands of emails exposing DNC officials (particularly Debbie Wasserman Schultz) and staff of actively sabotaging the Bernie Sanders campaign. The emails clearly show DNC staffers conspiring in ways to deal with Bernie Sanders and his rising support. Rather than treating Sanders as a viable candidate, they wrote him off from the start and worked against him to ensure Clinton received the nomination.

Clinton and Schultz’s defenders will argue that it was in the best interest of the party because Bernie was “unelectable,” but the irony of all this is that the DNC’s actions will ultimately ensure a Republican win in November. The DNC has lost the trust of so many of its voters and has only managed to further the narrative of Clinton’s corruption.

In addition to the DNC being exposed for keeping Sanders down, the leaks include audio recordings that reveal a system of donor access control, where proximity to government officials, including Obama and Clinton, is sold to the highest bidder. This gives Trump an enormous amount of ammunition leading into the general election debates and is sure to turn off younger voters who adamantly want money out of politics.

In response to the leaks, the DNC did what they do best and shifted the blame by attempting to demonize their “enemies” on the right. Rather than distancing themselves from relevant parties in the emails, the Clinton campaign chose to point fingers at Trump for encouraging “espionage” after he made comments directed at suspected Russian hackers to expose Hillary’s emails.

Here’s the comment from Jake Sullivan, Clinton’s chief foreign policy adviser, in response to Trump’s comments.

This has to be the first time that a major presidential candidate has actively encouraged a foreign power to conduct espionage against his political opponent. That’s not hyperbole, those are just the facts. This has gone from being a matter of curiosity, and a matter of politics, to being a national security issue.

Think about that for a second. Hillary sets up an insecure private server, plays off the fact it was a threat to national security, and now her campaign is effectively admitting that if the Russians were to find these emails, it would be a national security concern. Incredible.

Of course, no amount of finger pointing can distract from the reality that the Democratic Party isn’t particularly democratic. Here was Bernie’s response to the scandal, a sentiment you can be sure is shared by his supporters:

I told you a long time ago that the—that the DNC was not running a fair operation, that they were supporting Secretary Clinton. So what I suggested to be true six months ago turns out, in fact, to be true. I’m not shocked, but I am disappointed … What I also said many months ago is that, for a variety of reasons, Debbie Wasserman Schultz should not be chair of the DNC. And I think these emails reiterate that reason why she should not be chair. I think she should resign, period. And I think we need a new chair who is going to lead us in a very different direction.

Now, eventually, Wasserman did resign, but what comes next is simply dumbfounding.

Bernie Bots Set Fire to DNC

Hillary Clinton has made some absolutely terrible decisions in this election cycle. From a strategic standpoint, the incompetence of her campaign seems to know no bounds. It should have been obvious that the progressives were prepared to turn on the DNC, but nothing was done to appease what’s been the most unruly voter block in this entire campaign.

Following the resignation of Debbie Wasserman Schultz as DNC Chairwoman, Hillary made the baffling decision to hire Debbie as the honorary chair of her campaign. This all happened within an hour of her stepping down. I’m not making this up.

Needless to say, the Bernie Bots felt completely betrayed. The immediate hiring of Schultz was a slap in the face to anyone who voted for Sanders… all 13 million of them, and 43% of the popular vote.

Here’s a statement from Florida Democratic Delegate Shane Harris:

Bernie supporters are very offended that the person we rightfully or wrongfully responsible for putting her thumb on the scale and tipped it in favor of someone we thought who was not the best candidate or stronger candidate to go up against Trump. You don’t employ bad behavior by employing her 32 minutes after she has stepped down as an admission that you did something wrong…

The decision to reward Wasserman Schultz in face of progressive anger is bound to prove one of the biggest missteps of Clinton’s campaign. It also goes to show how incredibly out of touch the Clinton campaign is with its prospective voter base. A June Bloomberg pollalready found that nearly half of Bernie Sanders supporters would not support Hillary Clinton, and nearly a quarter of them will vote for Donald Trump — yet she goes ahead and does this.

In typical fashion, the progressive crowd did what they do best and protested furiously. Wasserman was booed into submission at a pre-convention conference, forcing her to pass her gavel duty on to Stephanie Rawlings Blake and eventually resign. The once-beloved Elizabeth Warren was heckled with chants of “We trusted you!” Hillary was forced to raise her voice over audible booing during her speech. Even Bernie was turned on and shunned by the progressive crowd after urging them to support Hillary.

At one point, Bernie delegates staged a walkout, and the DNC responded by hiring seat-fillers to make the party look more unified than it truly is. To top it all off, Bernie will be returning to Congress as an independent, effectively abandoning the Democratic Party altogether. The lack of unity on the left is palpable, and you can be relatively certain its disenchanted progressive base will not turn out to vote in November as they had for Obama in elections prior.

Julian Assange Promises to Dismantle Clinton Campaign

The timing of the exposed DNC emails was obviously no coincidence. Someone has it out for Hillary, and they know what they’re doing. The DNC will try to tell you it’s a Putin–Trump conspiracy, but the man who really holds the cards is WikiLeaks founder Julian Assange.

Julian Assange knows who the sources are but will neither confirm not deny whether it was Russia. If you read between the lines, though, Assange seems to be strongly suggesting that it is not Russia but rather another party. Earlier this week, Assange remarked to CNN:

Perhaps one day the source or sources will step forward and that might be an interesting moment some people may have egg on their faces…. It raises questions about the natural instincts of Clinton that when confronted with a serious domestic political scandal, she tries to blame the Russians, blame the Chinese, et cetera.

Speculation on the source of the hacks aside, one thing is perfectly clear: Julian Assange considers Clinton a personal enemy and is carefully timing the release of these documents to influence the election against her favor.

“We do see her as a bit of a problem for freedom of the press more generally,” Mr. Assange said in a June interview, proceeding to label Clinton a “liberal war hawk.”

It’s reasonable to believe — and in fact entirely likely — that Assange is saving the most damaging material for the days leading up to election. After all, this would have the most effect, and it is under the Obama administration that Assange himself is being indicted. If this is the case, the Clinton campaign will have virtually no path to effective damage control. Until November, this arguably makes Mr. Assange the single most powerful man in the world, as he effectively controls the fate of the U.S. presidential election.

When asked about what other information he has, Assange stated that he has “a lot more material” on Clinton relating to the election, and suggested the information revealed will “provide enough evidence” for her indictment.

Only time will tell exactly what kind of dirt on Clinton will be revealed, but it seems quite likely the presidential hopeful will have no recourse so long as Assange isn’t bluffing. Considering an already divided and disenchanted Democratic Party, a Trump presidency seems pretty much inevitable.

What This All Means for the Market

As voters, I’m sure you all will have mixed opinions on all this, and that’s perfectly fine. As investors, though, you’d be best off to stay objective, because if and when Trump wins the White House, there will be a few obvious investment opportunities to take part in.

For one, Trump has spoken on several different occasions about ending the war on drugs to take money out of the hands of the drug “czars.” Trump has also stated we’re losing the war on drugs, and we would have to legalize drugs to win that war. Simply put, Trump in the Oval Office means big bucks for the marijuana industry and is likely to spark enormous returns for marijuana stocks.

Jointly, there will be the issue of erecting a wall along the south border. If put into action, Trump’s wall would be the single largest U.S. infrastructure project since the Federal Aid Highway Act of 1956. Total cost of the wall would reach an estimated $25 billion, and thatmoney will filter right into the public companies responsible for its construction — and their investors.

At the very least, speculation within these markets will drive up the prices of specific/related stocks as the election nears. There are a number of stocks to bet on for a Clinton win as well, but at this point, the proper bet should be clear.

Until next time,

JS Sig

Jason Stutman

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