During a podcast yesterday of Schwab’s 2020 IMPACT conference Jeff Gundlach, a billionaire investor and DoubleLine Capital CEO, shocked the audience when he predicted President Trump would win in 2020 despite the polls. The reason why this is a big deal is that Gundlach correctly predicted Trump would win in 2016, proving the polls were wrong then.
Gundlach said, “Mind you, my conviction is way lower than it was four years ago. But back in [that period], when Trump was little more than an asterisk in the betting odds, I predicted he was going to win. This one is much more murky, but in my eyes, it favors a Trump win.”
Gundlach argued that public political polls are often “designed to create impressions” rather than illustrate reality and shouldn’t be trusted. He also said that many Trump voters are unwilling to engage with pollsters and the media because they fear retribution for their political beliefs, also known as the “shy voter” phenomenon according to which “Over 10% Of Trump Voters Won’t Admit Preferences To Pollsters.” In addition, Joe Biden also faces an enthusiasm problem.
As a market analyst and investors, we have been watching the 2020 election very closely because it will affect the markets. ABS’s team is committed to providing readers unbiased market analysis. That being said, we think Gundlack is right that Trump will win, especially given the Hunter Biden scandal.
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Given Biden’s statement against fossil fuels in the last debate, we strongly believe that many energy sector stocks, MLPS, and ETFs will take an immediate drop in price. In addition, health insurance and some pharmaceuticals companies could also go down. There may be a short play on renewable energy stocks and ETFs.
A Trump win will likely continue a Bullish market as a whole. The primary sector risk we see is technology. It is likely that there will be Congressional hearings and possible regulations of technology companies.
Investors that want a less risky route should consider investing in gold, consumer staples, or defense stocks. ABS believes that these areas should weather possible political storms from a win from either political party.