The time to buy Trump stocks

Trump pulled off a stunning victory. The Wall Street fashion this morning is to buy Trump stocks, sell bonds, sell gold GLD, -0.07%  and silver SLV, +0.29% and sell Clinton stocks. The probability is very high that you will lose money following Wall Street in buying Trump stocks and selling Clinton stocks.

Before discussing specifics, let us understand the background.

Let us start by carefully examining the chart of Nasdaq 100 futures NQZ6, +0.21%The equivalent ETF is QQQ, +0.46% I would have preferred to use a QQQ chart or S&P 500 chart SPY, +1.06%  because most investors do not trade futures, but ETFs do not trade all hours like futures.

Stock futures initially fell limit down 5% before recovering and even turning positive, as shown on the annotated chart of Nasdaq futures.

This up move is shocking Wall Street again as they were predicting further down move. Wall Street was wrong, and that by itself gives you a reason not to follow them.

Let’s dig down and take a look at what the Trump victory may mean for stocks.

Infrastructure stocks

Infrastructure stocks are flying sky high. On the surface, it makes a lot of sense. Trump plans to build a wall on the Mexican border and has been emphasizing improving infrastructure.

It is important to note that infrastructure stocks were also Clinton stocks. One of the favorite Wall Street theses was to buy infrastructure stocks as it was deemed a winning proposition irrespective of who won the election. As a result, these stocks were overbought going into the election and after the election, are becoming even more overbought. Furthermore, these stocks are expensive both relative to their own histories and also relative to their projected earnings growth rates even under Trump presidency.

Examples of the favorite Trump infrastructure stocks are Martin MariettaMLM, +11.57% Vulcan Materials VMC, +9.87% Granite Construction GVA, +10.90%Tetra Tech TTEK, +2.37% FLR, +10.16%  KBR KBR, +11.18%  , United RentalsURI, +17.12% AECOM ACM, +12.59% Terex TEX, +14.78% and ManitowocMTW, +14.22%

ld be avoided at this time and considered for buying only if there is a significant pull back.

Gold and silver

Wall Street was predicting gold to jump up $100-$200. Gold jumped up to $1336, nowhere near $100 gain, and then plunged to $1280. If you had bought gold on the Trump victory, you would be losing money right now. ETFs of interest are GLD and SLV.

A small position in gold and silver is fine, but taking on a huge position on Trump victory is not supported by hard data at this time.