The United States Election
What it means for green investments.
As I’m sure you’re aware, Donald Trump has been declared the winner of the latest presidential election in the United States.
Also important to note— Republicans are projected to win the presidency, Senate, House, and even the popular vote.
I’m not here to provide political commentary, and I never will. That isn’t what people are paying me for or what you subscribed to see.
Quite frankly, I find it incredibly exhausting to see half-baked political takes from content creators that I follow for commentary on financial markets.
My grievances with politics aside, the United States has shifted red. Let’s discuss what this means for green investing.
Before We Start
A major concern heading into this election was the fallout from what the results might be.
If the election weren’t decisively won by one side… that would give room to the opposing side to claim the election was rigged.
Given the overwhelming Republican victory, this is (hopefully) no longer a problem.
Kamala Harris recently conceded the race to Donald Trump.
Whether you rooted for one side or the other… it was important for the social cohesion of the United States that we had a clear result from this race. Otherwise, tensions between the two sides of the political spectrum would continue to worsen. And fast.
Many political pundits have entertained the idea that this country might devolve into civil war with how divided the nation has become. Obviously, more political extremism doesn’t benefit anyone.
Let us hope that we can de-escalate from here.
Your Gut Reaction Is Probably Worse Than Reality
What does Donald Trump winning mean for us? Frankly, it doesn’t matter very much.
As I outlined in my post “Heads I Win - Tails I Win More” my investing focus and research has largely been on sectors that garner bipartisan support.
Situations where if an industry receives benefits… that’s a bonus, but the underlying fundamentals work without any assistance.
Recycling, commodities, nuclear, agriculture, etc. There are plenty of industries that can benefit from the energy transition narrative but also provide underlying economics that aren’t reliant on government support.
We might even see some of these sectors continue to receive benefits from a Trump presidency.
In the extreme scenario where a Trump government is entirely hostile on the environmentalism front, a variety of these industries would still be fine.
Now, with that said, it can reduce the upside potential of some opportunities. Especially in capital-intensive industries like hydrogen, carbon capture, etc. This requires a certain level of nuance by area.
It boils down to this, though: if a sector is dependent on government subsidies, tax credits, or other incentives to remain economically viable… it should be avoided. I’ve been saying this for years.
See my video on what a Trump victory would likely entail:
Only time will tell what Trump changes up… but legislation like the Inflation Reduction Act (IRA) and other funding initiatives could see significant modifications, if not repealed entirely.
There are signs that he might not be overly aggressive. Trump has softened his rhetoric on electric vehicles, especially with the involvement of Elon Musk in his campaign.
Republican-led states are the major beneficiaries of policies like the IRA. So, we might actually see some pushback from the states themselves.
It’s not necessarily a clear-cut picture in many areas, and Trump says many things.
Of course, this is a blow to environmentalism, but if you follow the same types of sectors that I do… it’s not going to make a huge difference in our investments.
My Public Stock Picks
You can see this in the stocks I’ve publicly profiled and invested in:
Abaxx Technologies (ABXX) - Commodity futures exchange… doesn’t matter who the president is.
Aduro Clean Technologies (ADUR) - Plastic recycling… doesn’t matter who the president is. This is an environmental issue beyond climate change.
Base Carbon (BCBN) - Carbon credit project financing. Now, here is where things get a little more questionable. Barring some outlandish black swan event where the climate change narrative falls apart entirely, or CORSIA collapses because of Trump… I honestly don’t even think this changes much for Base. The U.S. isn’t the only country in the world. Europe, Canada, Australia, etc. are often more left-leaning than the U.S. and are implementing green initiatives of their own.
Overall, most of the stocks I’m looking at won’t be reliant on any government, and that was by design…
I will continue to track the news in these industries and what Trump ultimately plans to do when he takes office. Any updates will be posted here on Substack.