Debate Reaction

Did you watch the debate last night? Of course you did. We didn’t learn much about specific policies but that’s not really what these things are about. I don’t get political on this site because if you agree with my opinion, it doesn’t matter and if you don’t agree, well, I’m not going to be able to convince you of anything. It’s a waste of time.

Here’s what I really think of investing and politics, from a recent post called “Don’t Get Political”:

But the race is still an investment topic, whether we like it or not, so here’s my read of what happened last night…

My take is that Kamala Harris had as good a night as she could have possibly expected. The tactic of distancing herself from the Biden era and then establishing her emphasis on the future - “we are moving forward” was a frequent refrain - basically worked. She was never really forced to answer for the frustrations of the last four years. The way she ended every response with a little rhetorical trap for Donald Trump to get himself tangled up with was super effective. She knew where the pressure points were and she knew he’d be powerless to let the old grievances go.

Shutting down the fracking ban and gun confiscation stuff was a masterstroke and she did it concisely and matter-of-factly. I didn’t know she was a gun owner. She’s reversed herself on a lot of stuff in order to pull from the center and I think it was notable.

If I were advising her, with just a few weeks left til the election, I would tell her to do these three things:

1. Do not get caught in a photo op with people from the communist wing of the Democratic party. Steer clear of Bernie and AOC and the anti-semites in Michigan and Minnesota.

2. Stop talking about the “unrealized capital gains tax” nonsense that has no chance of making it through Congress anyway.

3. Lean heavily on “a woman’s right to choose” because it’s going to lead to one of the most historic gender gaps in election history and it’s the only way to sway the 10% or so of undecideds at this point. It’s the one thing Trump doesn’t have a consistent message for. Overturning Roe is like the dog who finally caught the car he was chasing. Now what?

If I were advising Trump, I would keep hammering her on the disastrous pull-out from Afghanistan and the dead soldiers the administration hasn’t properly acknowledged. I thought his best moment last night was illustrating the way in which unblocking the Iranian money pipeline led to the October 7th invasion of Israel and all of the other activities of Iran’s proxy armies in the region. Biden owns this chaos despite his support for Israel’s military defense. They tried to pin him down on whether or not he believes Ukraine succeeding is good for the free world. I actually believe him when he says he can stop the fighting there, I just don’t think people will be happy with the way he does it.

One of the few things that could still swing undecideds toward Trump is the daily drumbeat of migrant chaos across the country. No matter what Harris says, the invasion of our towns and cities is highly unpopular and it absolutely occurred on Biden’s watch. Trump will always have the upper hand when our attention turns to this topic, even if people don’t agree with the solution he’s proposing.

Anyway, that’s as political as I get here. I know she has some momentum coming out of this debate, but I don’t think the closeness of this race will materially change much in the time left. From an investing standpoint, it’s still the biggest unknown in front of us.

One way of observing the momentum shift away from the polls is to look at the stock price of Trump Media and Technology Group (DJT) , which tends to rise and fall based on his chances of winning in November. This is a $3 billion market cap company with only $4 million in revenue. Donald Trump personally owns about half of the shares. If he wins, the thinking goes, he can wave a magic wand and make all his legal and financial troubles disappear. Which means the platform has a shot of surviving. If he loses, he’s going to have to sell a ton of stock to pay his lawyers and all the judgments and fines he’s facing. It seems pretty binary for this stock.

Here’s the recent price action (purple) and a look at how much market cap it’s been shedding lately (orange):

Appearances

Special thanks to Caleb Silver for having me on the Investopedia Express podcast this week. You can listen at the link below:

https://www.investopedia.com/the-express-podcast-episode-204-8709261

I also wanted to thank my friend Jason Zweig for the shoutout he gave me at The Intelligent Investor this week. Jason took an excerpt from my new book about a little trick I use to cope with corrections, I hope you find it helpful!

https://createsend.com/t/d-12215F567EB0A7162540EF23F30FEDED

I was on the Money Rehab show with my old friend Nicole Lapin this week and we ended up turning it into a two-parter. Nicole has one of the biggest podcasts in finance so I hope I made some new fans with this one:

Part 1:

Part 2:

What Are Your Thoughts?

On the all new edition of What Are Your Thoughts, Michael and I tackled the recent headlines about BlackRock’s downshifting of risk for their model portfolios. We look at last week’s yield curve un-inversion and I went on an epic rant about Meta’s lack of user security.

Yesterday, the FBI said that fraud involving crypto on social media platforms is up over 40% year over year and that $5.6 billion has been stolen from people in 2023. I bet the number will be even higher in 2024. Meta earned $13.5 billion in profit last quarter. They appear to investing very little into protecting their users. This company’s apps are ground zero for one of the biggest financial crime waves in world history. Something’s gotta give.

Watch it here:

The Unlock

On our financial advisor-focused channel, The Unlock, we talked to Jason Pereira about the wealth tech decisions firms are making and why. Jason knows more than most on the topic. If you are a financial advisor, you can get the Unlock email blast delivered to your inbox by subscribing here.

Watch the new episode below:

Okay, that’s all from me today. Thanks for reading, have an awesome week! Talk soon - Josh