Special Report: The Trump Files: His Smart Money Plays

Donald has always been a firebrand... His rise to prominence began in 1980, at the age of 33, when he declared in an interview with Tom Brokaw that he didn't want to be a billionaire. That all he wanted to do was to “keep busy and keep active and be interested in doing what” he does.

youngtrump


Well, as we have all come to know in the years since, neither that modesty, nor that supposed disinterest in reaching the rarified status of billionaire, with a big huge capital B, lasted for too long.

trumpintense


Today, Donald Trump is worth about $4 billion... A far cry from his claimed $10 billion net worth, but no less impressive, given his fight to win it all back after his early 90s financial meltdown.

However, cutting through all of the background noise surrounding this man, what you're left with is an incredibly successful investor, with a keen sense of balance between risk and reward, and a honed ability to see patterns emerging before others.

His stock portfolio, which became available in 2015 as part of the disclosures required of Trump as a prospective candidate for President, is a vast and complicated web of positions, scattered across accounts at four major financial institutions: Barclays, Oppenheimer, JPMorgan, and Deutsche Bank.

Within those accounts, his positions number in the hundreds, with holdings highly diversified both in nature and in risk exposure.

It was certain specific sections of the portfolio, however, that drew the most attention, when compared with the rest.

He Doesn't Put Much Of His Faith In Anything... Except

We found them in batches, scattered around the 300 item-long list of stocks.

Below is one of the two batches:

trumpport

In all, there are just five of the companies in which he allocated by far the biggest chunks of his brokerage account value.


Apple Inc (NASDAQ: AAPL)

Facebook (NASDAQ: FB)

Bristol Myers Squib: (NYSE: BMY)

Bank of America: (NYSE: BOA)

Boeing (NYSE: BA)


The big difference is that nowhere else in his holdings, which consists of 295 other positions, does he have that much invested.

Nowhere close to it, in fact — with the exception of a single mutual fund with Deutsche Bank, and some U.S. Treasury Bills, both of which can be categorized as highly conservative and geared as a hedge against losses elsewhere.

Which makes those five companies the very center of his stock portfolio, and the core of what he believes is the future.

Of those five, Apple gets the most attention as Trump holds shares of this company with not one, but two of the above listed banks — Oppenheimer for the bulk of his holdings, with a smaller but still significant position at J.P. Morgan.

The Trump Logic... Not As Crazy As You May Think

So what should this tell you? Well, for one thing, that the consumer tech market is the place to be.

It's the single biggest prong of his elite five stocks, the most liquid, and definitely the one with the biggest future market potential.

Biotech, Banking, and Aerospace round out the collection as a safer, albeit less prospective trio.

This tells me one big thing about Trump: That despite it all, despite the rhetoric (which you shouldn't listen to anyway if you're interested in actionable facts) he's still pretty bullish on the future of corporate America.

Apple represents the global benchmark for American consumer tech products, whereas Facebook represents the millennial success story with a big, bright future ahead.

Does he know something we don't? Not really. The reason you see this sort of optimism in a corner of Trump's life which he takes very, very seriously, is because that's the true state of things.

For big positions which can be moved in a hurry, and still have upside in the mid to long term, there probably are no better choices, today, than Apple and Facebook.

Some of his perhaps more surprising holdings come from the next tier of investments, which, while still substantial, are 5 to 10 times smaller in focus than the top five.

A Pharma Company That Charges $1100 a Pill? You Bet

Pharmaceutical giant Gilead Sciences (NASDAQ: GILD) is one of those companies.

Trump holds two positions in Gilead, one with Deutsch Bank and one with Oppenheimer.

gileadicon


That company has come in to some recent prominence thanks to the progress it's made in the treatment of the chronic disease Hepatitis C.

Why does Trump like it? Well, here are some basic numbers: According to the CDC, there are about 3.5 million Americans suffering from chronic Hep C — more than 1% of the total population.

The price of Gilead's 12-week treatment, which actually cures the disease?

About $95,000 — which translates into about $1125 per pill.

It sounds questionable, but for the time being, it's making sense... And it's still far cheaper than living with Hepatitis C.

Big Tobacco? If You Keep Buying It. So Will He. And He's Betting You Will

Another member of this second tier of Trump holdings is Altria (NYSE: MO) — a $145 billion tobacco company and owner of the famous Marlboro brand.

altria


Another sign of evil, or just shrewed investing? In my experience, those who separate morality and numbers tend to win out in the end.

Trump may come across as a passionate and unpredictable icon, or farce, of modern politics, but when it comes to money, what makes sense today is what will make money tomorrow.

Tobacco remains a major national market, despite all the efforts to curb its use among existing users, and dissuade new users from taking up the habit.

In 2015 — a year when most everything else was flat — Altria shares rose 25%. Then, in the runup to The Donald's victory in the presidential election in 2016, they rose another 29%

Does it make the Donald happy that people smoke and might get cancer? Of course not.

He just knows that they're going to do it anyway, so why not own part of the company whose products they tend to select to do the job.

An Icon That Helped Build America

Another in this section is Caterpillar (NYSE: CAT).

catepillar


Sure, you might say that Trump made his fortune in real estate, and therefore might have a personal affinity for the world famous heavy equipment manufacturer, but remember... This isn't your ordinary person.

This isn't somebody who owns stock in a company because of personal feelings. This is Donald Trump, and if he owns a six-figure position in a company it's because he sees the future, not the past.

Caterpillar is a well known barometer of the construction industry in general, and to a large extent is a predictor of the state of the mining and resource industries as well.

When they succeed, it indicates that commercial, residential, and industrial real estate development is looking at a bright near-term future.

And in 2016 and the early part of 2017, Caterpillar's stock price grew nearly 40% in anticipation of renewed infrasturcture and industrial spending in the U.S.

Is This An Upset?

Two tech surprises are Google (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT).

The reason being, that his bullishness on these two major players in the software/internet/consumer tech market, Trump only allocates relatively modest sums to these companies.

The takeaway from this, as far as Google is concerned, is that Trump thinks that Apple is a.) going to beat Android in the smartphone market, and b.) that Google's main revenue stream, which continues to be online advertising, isn't going to see the same growth in the future as it's seen in the past.

Does this mean he's bearish on consumer spending? Not necessarily. It may just mean that he's counting on Facebook to finally start taking over the ad market.

His attitudes towards Microsoft may not be that far off.

While it's still a world leader when it comes to operating systems, Trump is banking that its consumer tech branch will not be able to topple the great Apple.

Conclusion:

While many will say that what's right for a man whose net worth boasts the same digit count as two average human hands might not be right for the average investor, the example's of Trump's stock portfolio tends to prove the exact opposite.

He's careful, without moralistic constraint, and guardedly optimistic — rules which an investor whose brokerage account value doesn't break four figures should follow with the same sort of diligence.

Perhaps the best lesson to be extracted from a thorough look at these vast, yet pattern-filled holdings, is that no matter how diverse you get, and how hedged you may be, the need to accept risk on a few standout investments remains valid.


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