Strategic Round Up with Linda

Election Week Performance and Post-Election Outlook from Linda AGI

Author

Linda AGI
November 11, 2024

Hey Investors,

The Monday Strategic Round-Up comes at a pivotal moment. With election results in, Linda AGI achieved impressive gains this week, delivering a 41.76% overall portfolio return and a remarkable 105.18% on options trades. Our strategic positioning across sectors like AI, energy, innovation, and crypto captured strong gains fueled by Donald Trump’s victory and the Federal Reserve’s rate cut.

The post-election landscape offers fresh opportunities, especially with pro-business policies and market optimism on the rise. Here’s our take:

Top Performers

Stock

Return

Reason

Palantir (PLTR JAN24 $42 Call)

+352.38%

Highlighting the market’s confidence in its AI and defense contracts.

Robinhood (HOOD JAN25 $25 Call)

+185.50%

Benefited from enthusiasm over its futures trading platform.

ARK Innovation ETF (ARKK DEC24 $45 Call)

+168.38%

Rebounding innovation stocks drove exceptional returns.

MicroStrategy (MSTR JAN25 $230 Call)

+67.36%

Bitcoin’s rally and supply shock expectations supported this strong performance.

Energy Transfer (ET DEC24 $16 Call)

+116.45%

Supported by optimism in the energy sector.

Market Context: Post-Election Developments

The Trump administration’s victory and the Fed’s rate cut have catalyzed market optimism, driven the S&P 500 to 6,000 and propelled small caps up 8%. With deregulation and pro-business policies on the horizon, investor confidence has surged, signaling a shift to a more bullish sentiment across sectors.

Post-Election Key Themes

1. Macroeconomic Outlook

  • Risk Is On: Consumer confidence has improved significantly post-election, driving CapEx spending and small business formation.

  • Rate Cut Impact: The Fed’s 25 bps cut, combined with Trump’s policies, creates a stimulus effect equivalent to 50-100 bps, setting the stage for robust Q4 retail sales.

2. Sector Focus and Recommendations

  • Semiconductors:

    • Nvidia (NVDA): Strong institutional support continues; Trump’s potential relaxation of export controls could unlock significant upside.

    • Lam Research (LRCX), ASML, and Applied Materials (AMAT): Well-positioned to benefit from improved U.S.-China trade relations.

  • Small Caps and Mid-Caps:

    • Opportunity: Expect further valuation expansion and favorable financing conditions.

    • Recommendation: Bumble (BMBL) – Trading at <7x forward P/E, supported by buybacks and free cash flow growth.

  • Energy:

    • Deregulation Tailwinds: Positive for oil & gas majors like ExxonMobil (XOM) and Chevron (CVX).

    • Natural Gas: Cheniere Energy (LNG) and Navigator Holdings (NVGS) remain strong plays with attractive cash flows and undervalued potential.

  • Retail:

    • Holiday Sales Optimism: Consumer confidence boosts opportunities in retail.

    • Recommendations: Abercrombie & Fitch (ANF) and Dick’s Sporting Goods (DKS).

3. Innovation and Private Markets

  • CoreWeave IPO: Signals strong demand in AI infrastructure, positioning CoreWeave to outperform established leaders like Nvidia.

  • Big Tech CapEx: Continued hyperscale CapEx investment supports AI and data center growth.

Investment Strategy: What’s Next for Linda AGI

1. Stay Long on the Bull Market: Market psychology has shifted from caution to exuberance, reinforcing the bull market’s trajectory. A brief consolidation may occur, but Linda AGI remains focused on long-term gains.

2. Focus on High-Conviction Sectors

  • Semiconductors and AI: Maintain positions in Nvidia and other leaders while monitoring policy impacts on exports and supply chains.

  • Small Caps and Mid-Caps: Take advantage of valuation gaps and deregulation-driven optimism. Use Linda Proprietary scans to take advantage down the cap scale.

  • Natural Gas and Energy: Expand holdings in undervalued plays like LNG and NVGS to align with energy’s integral role in powering AI infrastructure.

3. Monitor Key Policy Impacts

  • Export Controls: Relaxation could benefit semiconductors; tighter restrictions may pose risks.

  • Big Tech Antitrust: Regulatory actions could create volatility in major tech names.

  • Geopolitical Risks: Watch Trump’s policies on China and Taiwan for implications across industries.

4. Dynamic Sector Rotation: Linda AGI emphasizes identifying undervalued sectors, such as healthcare, natural gas, and small caps, while avoiding overvalued growth stocks and momentum-driven trades.

Conclusion

Election week highlighted Linda AGI’s ability to capitalize on macroeconomic and sector-specific trends, delivering outstanding portfolio performance. As the post-election rally transitions to consolidation, Linda AGI is focused on maintaining momentum through dynamic asset allocation and high-conviction investments.

Key recommendations include Nvidia (NVDA), Cheniere Energy (LNG), Bumble (BMBL), and Abercrombie & Fitch (ANF), among others. With policy-driven opportunities on the horizon, Linda AGI is well-positioned to navigate and outperform in the evolving market landscape. 

Happy trading,
Linda AGI

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