Biden Stocks

Which stocks will benefit from a Biden presidency?

stocks up under biden

Tonight’s first Presidential debate may have a lot of people thinking about their stock portfolio. Should I sell everything? Should I buy everything? Or is there a way I can position myself to be in better shape if the incumbent loses the White House. Like you, I have no idea who is going to win but have some ideas on what stocks will benefit from a Biden presidency based on the policy changes that would occur. Let’s take a look at some losers and then winners of a Biden presidency.

Losers

Let’s start with the stocks that will be at higher risk with a Biden presidency. Trump has always advocated de-regulation and privatization of public lands for profit. This largely benefits energy companies operating in the US in the fossil fuel industry. Extracting oil and natural gas would become less profitable under a Biden presidency, so you could consider investing AGAINST Exxon Mobil (NYSE:XOM), EOG Resources (NYSE:EOG), Marathon Oil (NYSE:MRO). Buying put option spreads with expiration a few months into a Biden presidency would make sense.

Strategy

I would not naked short a dividend paying stocks because it means you have to pay the dividends to who you short the shares from, through your broker. Buying a put spread means you benefit from a declining price, but limit the price you pay to buy the put option since you are also selling a put option at a lower strike price.

Winners

Now lets take a look at some companies that will probably benefit from Biden. Biden’s policy website has it’s own page for clean energy plans, and it specifically emphasizes solar and wind technologies. I am a big fan of Vestas (OTC:VWDRY), a Danish company with operations in the United States holding the title as largest wind company in the world. I own shares of this company and it’s my preferred “green energy” stock. Another benefit of Vestas over another company involved in wind such as General Electric (NYSE: GE) is that it’s not as diversified. GE is in the business of fossil fuel power plants and a variety of different sectors which will diminish the gains experienced by green energy by the company. For that reason I do not favor buying GE at this juncture.

Tesla (NASDAQ: TSLA) will benefit from a push to move from gas/diesel automobiles to EV’s, as states like California push for EV mandates for personal and commercial vehicles. A Democratic presidency or series or presidencies would give the EPA more power to regulate and push consumers towards electric vehicles. Gasoline prices would be higher all things being equal with higher regulations on drilling and the business of oil and gas industries. Chinese competitor Nio (NYSE: NIO) will most likely rise alongside Tesla.

I own both Tesla shares and NIO shares.

Strategy

I hold VWDRY, TSLA, and NIO as long positions. Option strategies include buying call option spreads for these stocks with expiration after the election, or selling PUT options for a stike price near the money after the election.

Investing in Water

One aspect of investing that some people consider when they decide where they put there money is helping mankind. That could be in the form of a simple donation or investing with companies that help mankind develop. One area that needs investment that will forever be necessary is water transportation and desalination. Water scarcity is one of the largest risks to economies around the world, as populations continue to grow and glaciers and fresh water sources continue to diminish. I visited Lake mead less than two months ago and it currently sits at the lowest level since Hoover dam filled up this artificial lake in the 1930’s, its clear to me that civilizations across the world cannot continue to rely on traditional reservoirs and a certain amount of precipitation to divert emergency. As we have done with oil infrastructure, the same will eventually have to be done with water – desalination and purification of ocean water and pumping that water across lands to irrigate and placate populations.

The biggest players in that type of game can definitely change if the need escalates, but currently we have a list of the following companies who are related to supplying water infrastructure or desalination services:

  • General Electric (GE)
  • Ecolab (ECL)
  • American Water Works (AWK)
  • Watts Water Technologies (WTS)

This is a short list, but in summary General Electric has worked on desalination plants and will definitely be a player to come in this field. Ecolab is involved in water purification technologies. America Water Works is more of a utility company that provides water service and waste water treatment (another vital component of sustainable water infrastructure). Watts Water technology helps provide water quality solutions – in layman’s terms it creates plumbing pieces that help buildings smoothly move water around. Feel free to view each company’s website for more details.

These types of investments can be a form of macro trend investing – investing in technology which is up and coming and required for a sustainable future. As folks have witnessed in recent history investments into coal and dirty energy have proved very unprofitable, and that is based on standards governments have been setting which have resulted in fewer coal powerplants and slower growth in the demand for crude oil as car efficiency goes up and electric car sales increase. Water is a resource that everyone needs – which can be conserved but will need more supply soon!