Red or Blue, These Stocks are Tried and True, Ep #46

The Capitalist Investor - Episode 46

Outline of This Episode

[1:05] We talk election-proof stocks
[3:07] The fantasy football play
[4:27] The consumer play will remain strong
[8:09] The home builder/home improvement industry
[11:52] The infrastructure package
[15:43] Tech + healthcare
[21:10] International stock options
[22:00] The impact of a democratic sweep

What do the betting odds tell us?

As of the time of recording this episode, betting odds are 67% in Biden’s favor. But the stock market has been performing well since August 3rd, which implies that the incumbent (Trump) would remain in office. But all of the Biden stocks are outperforming the Trump stocks. The truth is, no one knows how the election will end. So we’re going to share stocks that will stand the test of time and perform well regardless of who is in office.

The consumer will remain strong

The US consumer plays a role in everything that we talk about. A black swan event like COVID-19 can handcuff the consumer. But when things are bad, the Fed and the government are quick to step in and provide relief.

What does that mean? Amazon will remain strong. Amazon is the biggest no-brainer. It’s a completely frictionless and easy experience and game-changer in the space. Who could disrupt them? It will remain an amazing company no matter who is in the office.

What are we looking at in the home building and home improvement industry? Listen to hear our thoughts!

Our take on infrastructure

Whether it’s new roads or 5G cell towers there are certainly some opportunities within infrastructure. Regardless of who is in office, changes with infrastructure need to and will happen. Old bridges and roads need to be repaired. New infrastructure needs to be built.

Gavin Newsom—the governor of California—recently said that by 2035 you will no longer be able to purchase a gas-powered vehicle in California. Imagine the electric charging station buildout that needs to go into play in California. It’s a complete makeover. What are our plays in this niche? Listen to hear our take.

The tech + healthcare space

Tech and healthcare will continue to perform well. Derek believes Medtronic is a solid and steady performer. It doesn’t matter who is in office for them to succeed. Intuitive Surgical is another option. Robot-assisted surgery will become more prevalent.

As far as tech goes, go with Apple the whole way. When we look at Apple, we see it as a safety trade. 5G will be a large catalyst for people switching out their phones and everyone has to buy a phone. They’re also innovating by coming out with a mini option. Apple is a smart move for anyone.

So is Microsoft with gaming (with the Xbox) continuing to be a huge trend. Microsoft Office is on every PC in the world. Microsoft Teams is a well-oiled machine. With Microsoft, you also get everything you’re looking for. Between mobility and the cloud, you have your bases covered with Microsoft and Apple.

The impact of a democratic sweep

The bottom line? Unless there’s a Democratic sweep in the senate, the market may not see much of an impact. If a sweep does happen—and Biden’s tax rate goes from 21% to 28%—earnings would drop by 10%. But he won’t be able to push that legislation through if the senate stays red. But if it does happen, we cover tried and true stocks in this episode. Don’t miss it!