Gerardo Del Real,
Editor
Nov. 27, 2024
Friend, colleague, and business partner Nick Hodge and I just returned from the New Orleans Investment Conference which celebrated its 50th year.
As usual, the conference showcased a who’s-who of speakers on topics ranging from gold, real estate, oil, inflation… and of course politics.
Nick and I had a workshop explaining why the recent election will be a very consequential one. Politically, socially, and economically.
President-elect Trump has nominated Scott Bessent as Treasury Secretary; a nomination the market celebrated with new all-time highs.
It was also an iconic nomination because for all of the ‘drain the swamp’ talk and the ‘George Soros is evil’ talk, the man selected by President-elect Trump is the former investing chief for, wait for it — George Soros.
Mr. Bessent will be tasked with dropping the federal corporate tax rate from 21% to 15%. Accomplishing that while juggling a $36 trillion national debt will be challenging to say the least.
Make no mistake, Bessent is a moderate and will serve as such… but also make no mistake he is very much Wall Street’s guy, hence the overall indices’ reaction to the nomination.
The mandate is to bring down inflation while stimulating growth.
So expect a wave of deregulation. Expect an increased focus on domestic oil production. Expect an expedited permitting process for uranium companies. And expect asset owners to benefit from Mr. Bessent’s bias towards Wall Street.
Expect Elon to be a proponent for EVs, which will be easier to accommodate given that a lot of the jobs benefits from the IRA are in Republican-friendly states.
Bessent won’t be the only voice affecting policy, however. Commerce Secretary nominee, Howard Lutnick, also a prominent Wall Street figure, will lead the trade war charge mandated by President-elect Trump.
It’ll be interesting to see that play out given Lutnick’s substantial business ties with China.
Lutnick’s financial services firm BGC Group has a 33% stake, valued at nearly $28M, in a joint venture with China Credit Trust, a “financial state-owned enterprise” whose largest shareholder is state-owned China People’s Insurance Company (PICC Group).
While the overall indices have celebrated the picks thus far, gold hasn’t given an all-clear, and it looks like it’s in wait and see mode before another leg higher (which I suspect will occur regardless of policy given the $36 trillion debt) or a moderate pullback while the incoming administration outlines clear policy initiatives.
2025 is going to be one of the most profitable years in the commodity space regardless of the direction the administration takes. Maximizing that will require diligence and the appropriate positioning.
Positioning I’ve been doing all year and positioning that has led me to what I believe could be the best pick of my career. One very few people know about and one I recently published a presentation on.
Let’s get it!
Gerardo Del Real
Editor, Daily Profit Cycle