It is again time for America’s renewal. Time for people to heal from COVID. Time for businesses to open. Time for employees to return to offices. Time for neighbors and friends to talk with each other without fear of political hatred. Time for value and growth stocks to both shine.

Where are we now?

We are experiencing an extremely dramatic political Kabuki transition theater in Washington, DC. The principal actors are overplaying their roles with outrageous pronouncements and elaborate kumadori make-up. The term Kabuki originally suggested the unorthodox and shocking character of the Japanese art form. As “unorthodox” and “shocking” are exactly apt summation of the situation in our nation’s capital.  Notwithstanding the Kabuki, most American businesses and regular folks alike positively welcome the transition from 2020 to 2021. Everyone has had enough of COVID: enough of shutdowns, kids at home, and distancing from friends and family. 

Where do we go from here?

I expect a new BIG Marshall Plan type program by the government to get as many people as possible vaccinated as quickly as possible. That provides us investment opportunities in logistics companies— like FedEx, XPO, etc. I then expect focus on spending on new infrastructure around the country. That will provide us opportunity to invest in material stocks. Dear Friends, I proclaim infrastructure opportunities with my eyes wide open because every new government promises to do bold new infrastructures. So far through presidents Bush (8 years), Obama (8 years), and Trump (4 years) nothing BIG and enduring has happened;  other than I invest in infrastructure companies, we get some initial excitement, but they fizzle back because nothing BIG gets done in Washington, DC.  I am looking for 5X, 8X and 10X type returns when we are right. We have not seen that generally from infrastructure companies. I have however adroitly capture 2X to 5X returns on some infrastructure derivatives like Sunrun Energy and I think we shall do the same with the rear earth company MP Materials.  

On fixed income and alternatives:

Rinse and Repeat: The song Wind Beneath My Wings captures exactly what the Federal Reserve Bank has been to the stock market and economy since the COVID crisis began: "…It might have appeared to go unnoticed. I want you to know, I know the truth. I would be nothing without you… I could fly higher than an eagle. For you are the wind beneath my wings."

On Alternatives: 

What should we look out for?

Previously, (specifically, my October 2019, letter), I provided you with a warning that the 2020 election is coming, and that things are probably going to be said and done that have never been said or done before. I humbly repeated the same message in October 2020, now we all saw what happened on Wednesday Jan 6th, 2021, when people stormed Congress. I WILL AGAIN REPEAT. PLEASE BE CALM. PLEASE DO NOT CALL ME TO ASK IF I AM GOING TO BE SELLING STOCKS BECAUSE SOMEONE SAID THIS OR THAT IN WASHINGTON, DC.

In conclusion:

The tension and stress coming from The Washington, DC Kabuki Theater of the Absurd shall end on Wednesday January 20th and the market is correct not to overreact to the drama.  I wrote both in October 2019 and 2020 that the great people and businesses of America will survive and thrive after the election even if it takes weeks to declare a winner. That is exactly what we have experienced thus far. Yes, transitional times are not easy—they are fraught with tension and fear. But they also come with immerse opportunities for those that are looking. I am looking!!!