The Investing Opportunity in MAGA 2.0 As Recession Looms

My prediction remains: Trump will cause a recession by the time Trump 2.0 is over. Republicans have that in their DNAs, naturally or otherwise. George Bush Sr caused one; Bill Cinton cleaned it up. George Bush Jr caused a really big one; Obama cleaned everything. Under Trump 1.0 we had one, Biden took care of business. Now, another one will happen.

Ndubuisi does not buy stocks unless during recessions as recessions provide opportunities to have great multiples. Outside recessions, stock markets are boring for me on those single-digit or low double-digit returns.

But as we wait for the next recession, I am moved to comment on something unique about Musk, Trump and America: ability to fire thousands of people with no one saying he is eliminating “Igbos”, “Yorubas”, and “Hausas”, as would have been the case in Nigeria. Yes, these men are enjoying the firing of federal workers, with no concerns on balancing the federal character on the lost jobs!

From LinkedIn: “Layoffs rose 245% in February compared to the month prior…. Of the roughly 172,000 people who were let go last month, more than one-third, or 62,000, lost their jobs to cuts by the Department of Government Efficiency, led by billionaire Elon Musk. The monthly total is the highest since July 2020, and also the highest figure for February since 2009, when the country was grappling with the global financial crisis.” They are just starting.

MAGA 2.0 will provide a huge opportunity to buy low and then capture value later in this innovation age powered by AI. I expect a huge tax cut soon, and it will be bigger than any spending cut, and typically whenever that happens, you see financial imbalance, triggering an economic avalanche. Then the BUY moment will present itself!

MAGA 2.0 presents opportunities: just save for the moments.

Comment on Feed

Comment 1: Thank you for sharing your insights and predictions. I find your perspective on economic cycles and investment strategies quite intriguing, especially the idea of leveraging recessions for investment opportunities. While I agree that recessions can present unique buying opportunities, I would like to add a nuanced perspective on the broader implications of such economic downturns.

Recessions, while beneficial for investors like yourself who are positioned to capitalize on them, often come at a significant cost to the broader population. Job losses, reduced consumer spending, and economic instability can disproportionately affect lower-income households and small businesses. For instance, while layoffs in the tech sector or federal workforce might create opportunities for investors, they also lead to financial insecurity for thousands of families. This duality is worth considering when discussing the potential benefits of economic downturns.

Additionally, your observation about the lack of ethnic or regional bias in layoffs in the U.S. compared to Nigeria is an interesting cultural contrast. However, it’s worth noting that even in the U.S., layoffs can have uneven impacts across different demographics, such as minority groups or older workers, even if these disparities aren’t framed in ethnic or regional terms. The systemic issues in hiring and firing practices, while less overt, still exist and can perpetuate inequality.

As for the potential economic policies under a hypothetical Trump 2.0 administration, I would caution against assuming that tax cuts alone will trigger a recession. While large tax cuts without corresponding spending reductions can indeed lead to fiscal imbalances, the broader economic context such as global market conditions, monetary policy, and technological advancements also plays a significant role. For example, the rise of AI and automation, as you mentioned, could offset some of the negative impacts of fiscal imbalances by driving productivity gains and creating new industries.

To put it simply, while I agree that recessions can create investment opportunities, it’s important to balance this perspective with an understanding of their broader societal impacts. Moreover, the interplay between fiscal policy, technological innovation, and global economic trends will likely shape the next recession in ways that are not entirely predictable. Saving for the “BUY moment” is a sound strategy, but it’s equally important to consider the ethical and social dimensions of investing during times of economic hardship.

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