The New Trump Trade (Not TACO) - 195

We've all heard of the "TACO" (Trump Always Chickens Out) trade, but there's a new, more powerful government-driven strategy in play. This episode reveals a simple yet potent playbook for what we're calling:

The New Trump Trade (Not TACO).

We explore the simple thesis: when the U.S. administration takes a direct ownership stake in a company, we should consider trading right alongside them. This isn't just a theory; we're seeing the results in real-time. We'll look at the government's involvement with Intel (INTC) and how that stock has nearly doubled, and then dive into a watch list of rare earth and materials companies like MP Materials (MP), Lithium Americas (LAC), and Trilogy Metals (TMQ) that have seen explosive returns since the government stepped in.

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Key Takeaways

• The New "Trump Trade" Thesis: The core idea is simple: if the U.S. government takes an ownership stake in a public company, investors should consider "following the smart money" and buying shares or long-term options, as the company is now a strategic national asset.

• The Intel (INTC) Example: The playbook started with Intel, which the government partnered with to secure the U.S. chip supply. Since the government's involvement, the stock has nearly doubled, proving the thesis that these companies "are not going to fail."

• The Rare Earth Materials Watch List: The strategy has expanded as the government seeks to secure domestic supplies of rare earth metals. A watch list of companies the government has already bought into includes:

  • MP Materials (MP): Up from ~$30 to ~$89.

  • Lithium Americas (LAC): Up ~66% in two weeks.

  • Trilogy Metals (TMQ): Up from ~$2 to ~$8 in two weeks.

• The Government Will Set Price Floors: The administration has announced it will buy more companies in other industries and, significantly, will set price floors for these commodities. This is great for company profits (though not capitalism at its best) and provides a strong tailwind for the stocks.

• How to Play It: Stocks or LEAPS: Investors can trade these companies by either buying the stock outright for a long-term hold (aiming for 3x, 5x, or 10x returns) or by buying long-dated LEAP options (6+ months out) to control the position with less capital.

"The Trump trade that I'm discussing... is that the companies that the administration buys or takes a piece of are could be very excellent traits... we should be trading right alongside the government."

Timestamped Summary

• (00:40) The Old "TACO" Trade: A quick review of the old "TACO" (Trump Always Chickens Out) trade, which was based on him bluffing about tariffs.

• (03:52) The Fed Playbook (Market Context): A brief look at the current market environment, with the Fed signaling rate cuts, which provides a bullish tailwind for the stock market into the end of the year.

• (04:48) The New Trump Trade Explained (Intel): The episode reveals the new playbook: follow the government's investments. It starts with the Intel (INTC) deal, which has seen the stock nearly double.

• (08:23) The Rare Earths Watch List: The host unveils the new watch list of materials and mining companies the government is investing in, including MP, LAC, and TMQ, and their explosive returns.

• (14:52) How to Trade These Stocks: A discussion on the best ways to play this trend, such as buying the stock for a long-term hold or using long-dated LEAP options for a cheaper entry.

What do you think of this 'New Trump Trade' playbook? Let us know your thoughts in the comments. If you found this insight valuable, share this episode with a friend who is looking for new trade ideas.

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