Outperforming Tesla: Trump's Stock Picks

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Post on Nov 12, 2024

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Outperforming Tesla: Trump's Stock Picks

Former President Donald Trump's penchant for making bold pronouncements is well-known. From his tweets to his rallies, he's never shied away from offering opinions, even on topics outside his purview, like the stock market.

While Trump's political policies and economic decisions have been widely debated, a curious question remains: How did his stock picks perform?

The "Trump Slump" and the Rise of Tesla

The period from 2017 to 2021, Trump's presidency, saw a surge in stock market performance. The Dow Jones Industrial Average reached record highs, driven by tax cuts and deregulation. However, the period also saw a dramatic rise in the stock price of Tesla, a company Trump often criticized. While the S&P 500 grew by an average of 15% annually during Trump's term, Tesla's stock skyrocketed, posting an average annual growth rate of over 100%. This begs the question: Did Trump miss out on a massive opportunity by publicly dismissing the electric vehicle manufacturer?

Trump's Stock Portfolio

While no official portfolio of Trump's personal stock holdings has been released, his public statements and media reports have shed light on some of his preferred companies.

• Energy Companies: Trump expressed strong support for the American energy industry, particularly oil and gas producers. He championed policies that favored these companies, often at the expense of renewable energy sources. Companies like ExxonMobil, Chevron, and ConocoPhillips saw their stock prices rise during his term.
• Defense Contractors: Trump's focus on military spending and an increased defense budget favored companies like Lockheed Martin, Boeing, and Raytheon. These firms benefited from increased government contracts, leading to stock price gains.
• Pharmaceutical Giants: Trump's administration was actively involved in negotiating drug prices and pushing for increased drug development. Companies like Pfizer, Johnson & Johnson, and Merck saw moderate growth in their stock prices.

Performance Analysis

While Trump's stock picks generally aligned with his economic policies, their performance varied. While energy companies and defense contractors saw decent growth, they were overshadowed by the meteoric rise of Tesla. Moreover, the tech sector, particularly companies like Apple and Amazon, also outperformed many of Trump's favored companies.

The Bottom Line

It's difficult to conclusively assess the performance of Trump's stock picks. While his favored sectors saw growth, they were largely outpaced by the broader market and the electric vehicle boom. While the "Trump Slump" narrative is contested, the performance of Tesla and other tech giants does highlight the limitations of aligning stock selection with political preferences.

Ultimately, the stock market is influenced by a complex interplay of factors, and focusing solely on political leanings or personal opinions may not always lead to profitable investment outcomes.