Monday, November 14, 2016

Market appears to believe in Donald Trump and infrastructure

The market wants to believe that Mr. Trump’s talk about trade protection, tariffs, building walls and calling people names was simply what he had to do on the campaign trail. His conciliatory acceptance speech—and it really was a conciliatory speech—was perhaps the best speech he’s given in the past year and a half. He seemed to have turned the corner; it was a completely different attitude.

The market seems to believe he’s going to spend money on infrastructure—on roads, bridges, airports, port facilities and hospital. The speech indicated he was going to take a different stance than his demeanor indicated on the campaign trail. As soon as his speech was over, the market turned around.

You have to take Trump at his word. He used the word “infrastructure” over and over in his speech. That means steel, cement, asphalt and the drilling infrastructure that goes into creating natural gas. They are things that, if you drop them on your foot, they’re going to hurt.

Mr. Trump is a builder, and builders build. So as an investor, you go out and find the simple things. I don’t think this fella is particularly interested or adept at high-tech or big pharma; he’s going to use simple things to build buildings, roads and bridges. If you keep it that simple, you’re probably going to do OK. 

In general, I think Mr. Trump made it abundantly clear that he’s going to invest in infrastructure.