Too close to call … the House and Senate power-balance appears to remain the same … a reminder of where to direct your focus
It’s the election outcome we wanted to avoid — but don’t tell that to the surging stock market.
As I write Wednesday afternoon, the outcome of last night’s presidential race is too close to call.
Several battleground states are still in play that could swing the victory either to President Trump or former Vice President Biden, including Pennsylvania, Michigan, Wisconsin, North Carolina, Georgia and Nevada.
As we stand right now, Trump has 213 electoral votes, and Biden has 238, according to the Associated Press.
Meanwhile, over in Congress, it appears that the power-balances will remain as-is.
Democrats are looking to hold the House of Representatives, while Republicans appear to remain in control of the Senate.
In the wake of this presidential uncertainty, popular opinion would have it that stocks would be reeling.
Not so much.
The market has exploded higher, with the Dow up 2.6%, the S&P up 3.2%, and the Nasdaq up 4.2% as I write.
It appears the euphoria is based on the fact that a “blue wave” didn’t materialize.
Wall Street has been concerned that a Biden administration plus control over Congress would mean greater regulatory scrutiny and restrictive policy, as well as higher corporate and capital gains taxes.
So, for now, the presidential outcome hangs in the balance. But this means that, despite the market’s gleeful mood today, the risk of downward volatility is still very much a possibility in the days to come.
***How do we handle this as investors?
Well, we keep our focus on the big picture.
Today, we’re going to do exactly that with the help of Matt McCall, editor of Early Stage Investor.
You see, widespread innovations are happening right now in technology, healthcare, energy production, and transportation.
These innovations are going to flourish in the coming years regardless of who takes the White House.
Better still, these innovations will massively increase our world’s productivity and efficiency … and in doing so, create tsunamis of wealth for informed investors.
Matt’s goal in Early Stage Investor is to find the companies powering these innovations, then ride them higher for years.
He calls it “hypergrowth investing.”
Here’s Matt, describing it in greater detail:
It’s the investment of money into industries and businesses poised to grow at least 10 times (and often 100 times) in size.
Hypergrowth investing can allow you to make five … 10 … 50 … even 100 times your money on a single stock. It gets you into massive stock market winners like Amazon very early in their lifecycles.
So, in today’s Digest, let’s remind ourselves why the outcome of this presidential election is little more than noise, and huge investment wealth remains 100% available to us regardless of the candidate who’s voted in.
***Who takes the White House doesn’t make much difference in the big picture
About two weeks ago, Matt wrote to his Early Stage Investor subscribers, prepping them for the outcome of the presidential election on the market.
From Matt:
… it does not matter who wins the election.
Yes, there are major differences between Donald Trump and Joe Biden, but they are more similar than most people realize when it comes to their impact on the economy — which is what matters most for us as investors.
… no matter who is running the U.S. for the next four years, there will be more electric vehicles (EVs) on the road, 5G will continue to expand, artificial intelligence (AI) will become more prevalent in our everyday lives, biotech breakthroughs will occur, and so on.
Simply put, hypergrowth trends don’t care who is in the White House.
No single person can slow expansion of the biggest trends in the world — the trends of today and tomorrow.
It’s at this point that Matt zeroes in on the real reason why who ultimately wins the presidency doesn’t matter all that much to the market at large.
It reduces to one, primary thing …
Spending.
***The tidal wave of federal dollars that is going to hit the economy will dwarf the differences between Trump and Biden
Here’s how Matt put it:
… both candidates will spend. And I mean SPEND.
I’m talking drunken sailor spending.
That future spending on top of the trillions of dollars in stimulus already making its way into the economy will lead to a booming economy for years.
I am not here to debate if this is the best move for the country in the long term.
My interest is making money, and this is a reality. A reality we cannot ignore as investors, and a reality that we must take advantage of in the stock market.
Matt points out that Trump may be looking to cut taxes and Biden to raise them, but both plan to direct trillions of dollars at the economy.
As we’ve highlighted here in the Digest, Biden has already said he will spend more than $2 trillion on new clean energy infrastructure.
Trump will look to spend trillions on infrastructure as well, but with less emphasis on clean energy. Here’s Matt, summarizing this point:
Despite any differences, both candidates want to be known as the president who boosted the economy after the worst pandemic in a century.
And what’s the best way to do that?
Spend more.
***We’ve already seen how this turns out
If you’re still not sold that hypergrowth investing is more powerful than who takes the White House, let’s see what history tells us.
In Matt’s issue, he points readers back to the year 1990 — that’s when the human genome project began.
You’ll recall that George H.W. Bush — a Republican — was president at that time.
Fast forward to April 2003 when the genome project was completed.
By then, the White House had flipped to eight years of Democratic governance under President Clinton. Then it was back to the GOP with George W. Bush.
After that, we know it flipped again and again, from Obama to Trump.
Here’s Matt on the takeaway:
Even though the White House kept changing between parties, the hypergrowth gene sequencing trend continued.
It didn’t matter what person or what party was helming the country, sequencing human genomes experienced exponential growth.
Just look at the chart of Illumina, the leader in genome Just look at the chart of Illumina, the leader in genome sequencing.
Since 2003, the stock is up 35,240% — turning every $10,000 into $3.534 million.
***It’s time to refocus on the future
As you read this, we’re sitting on the verge of a transformation very similar to what we saw in the 1990s.
A moment ago, we talked about the human genome project that began in the 90s, and made wise investors life-changing wealth.
Right now, there are a handful of innovations in their early stages that will change our world in a way the Internet did in the 1990s … the way railroads did in the 1800s … and the way the automobile did in the 1900s.
Informed investors stand to make gains similar — possibly even larger — than those made during these respective booms.
And best of all, who gets voted into the White House in the coming days can’t stop it.
For more on how Matt is positioning his Early Stage Investor subscribers for this upcoming, booming decade, click here.
Have a good evening,
Jeff Remsburg
