The Best ‘Trump Trade’ is Really the ‘Icahn Investment’

The Best ‘Trump Trade’ is Really the ‘Icahn Investment’

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We’re not even a full month into 2017. Just 30 days in, and 2017 is already one heck of a year. However, only in the last 10 days have things really gone up a gear.

The ‘Trump factor’ is nothing short of extraordinary. His actions are extreme. But he is at least following through on everything he said he’d do. It shouldn’t come as a surprise really.

Trump said he’d build a wall. And the US is starting to build a wall. He said he’d ban Muslims. And you guessed it — he’s banning Muslims from entering the US.

If you’re going to ban Muslims, then why not Indonesia?

I was thinking how Trump’s immigration ban has any benefit to the US. The extreme policy in supposed to protect the US. If anything, it makes the country a bigger target.

There’s no way this helps the US. And it is cherry-picking targets, too. Like the ban on just seven major Muslim countries. For a start, if Trump was worried about Muslims, then why didn’t he ban Indonesia?

There are more Muslims in Indonesia than anywhere else in the world. Indonesia has around 205 million Muslims.

And the seven countries banned from entering the US? Iran has 74.8 million Muslims. Iraq has 31.1 million. Sudan has 39 million and Yemen 24 million. Syria has 20.8 million. And then there’s Libya with 6.3 million and Somalia with 9.2 million. The grand total…205.2 million.

Unbelievably, Indonesia has as many Muslims as the others combined.

Yet for some reason, if you’re from Indonesia, the US is happy to have you.

Trump has no business interests in Iran, Iraq, Libya, Somalia, Sudan, Syria or Yemen. However, his company, Trump Hotels, is opening two six-star hotels in Indonesia. According to The New York Times,

One resort, planned as the largest in Bali, will overlook a spectacular Hindu temple. The other, in the verdant hills of West Java, will adjoin a theme park. The properties will be so luxurious, the Trump Organization says, that even an impressive five-star rating will not do them justice. So it will give them six stars instead.’

The NYT also highlights Trump’s relationships with high-ranking Indonesian officials. These include a former politician who had to step down because of corruption allegations. These allegations had to do with alleged extortion of mining company Freeport-McMoRan [NYSE:FCX].

Freeport has major mining operations in Indonesia. In particular, its exploration and development of the Grasberg minerals district. According to the company, ‘The Grasberg minerals district contains one of the world’s largest copper and gold deposits…’

The NYT also says Freeport is looking to extend its mining licence in Indonesia. With Trump in office and his pals in the Indonesian government, that might just happen.

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The ‘Icahn investment’

You see, one of Freeport’s major shareholders is Carl Icahn. Icahn is also Trump’s special adviser.

As at 30 September, 2016, Carl Icahn held 104 million Freeport shares. That’s 7.64% of the company. Icahn began to buy it up in July 2015. By the end of 2015, he had a huge stake in the company. But why?

In December 2010, it was trading around US$60. And by January 2016, it was US$3.94. Most people would walk away from a company like that. However, Icahn must have seen or known something the rest didn’t.

Since January last year, the stock has taken off like a rocket.

This US$23.04 billion miner is up 315% in the last year. At the close last Friday, it was US$16.37. Today, Icahn’s holding is worth US$1.76 billion.

One year ago, that holding was worth US$424 million. Some might suggest Icahn is just a shrewd investor. Or is it that he just knows the right people — or person?

Also according to Fortune,

U.S. President Donald Trump helped send shares of Freeport McMoRan soaring Tuesday after he signed an executive order putting his infrastructure spending plan into action.

Shares of the metals and mining company jumped 8.27% Tuesday as investors anticipated higher sales for Freeport under the infrastructure-focused and energy-friendly Trump administration.’

Upon naming Icahn as his special adviser, Trump said,

Carl was with me from the beginning and, with his being one of the world’s great businessmen, that was something I truly appreciated.’

This got me thinking…

How have some of Icahn’s holdings performed year-to-date? With the ‘year of Trump’, how much richer (or poorer) is Icahn? Well, let’s take a look at some of his investments.

  • Herbalife [NYSE:HLF], up 16.93%
  • Freeport-McMoRan [NYSE:FCX], up 24.11%
  • PayPal Holdings [NASDAQ:PYPL], up 2.03%
  • American International Group [NYSE:AIG], down 0.15%
  • Cheniere Energy [NYSEMKT:LNG], up 18.44%
  • CVR Energy [NYSE:CVI], down 8.78%
  • American Railcar Industries [NASDAQ:ARII], up 4.17%
  • Hertz Global Holdings [NYSE:HRI], up 22.93%

I think you get the drift here. Year-to-date, Icahn has done well with his investments. I guess it pays to have friends in high places.

I’m not suggesting there’s anything illegal going on. Conflicts of interest? Well, quite possibly.

But it’s clear that a Trump presidency has been good to Icahn. And it could be good to you.

What it shows is that the best ‘Trump trade’ might not even be a Trump trade. You could just follow his mate, Carl Icahn. If you did, your portfolio would have seen a cracking start to the year.

That’s the kind of start you want to 2017. Not turmoil and trouble thanks to the president himself.

That’s why the best ‘Trump trade’ for 2017 might be to follow Icahn. Get on the ‘Icahn investment’.


Sam Volkering

Sam Volkering
Sam is Editor for Money Morning and it's small-cap and technology analyst. He spends his time hunting down the most exciting stocks on the planets, whether they’re potential-packed volatile small-caps or tech firms transforming our future through cutting-edge technologies. You can find more of Sam’s work over at Australian Small-Cap Investigator, where he shares the best small-cap stocks he finds on the ASX, or at Revolutionary Tech Investor where he reveals the latest breakthrough tech investment he’s discovered. If you’d like to more about Sam’s financial world view and investing philosophy then join him on Google+. It's where he shares investment insight, commentary and ideas that he can't always fit into his regular Money Morning essays.
Sam Volkering is Editor for Money Morning and its small-cap and technology analyst. He’s not interested in boring blue-chip stocks. He’s after Australia’s rising stars — companies whose shares trade for cents on the dollar — and are often shunned by those in the financial services industry. His mission is to make you big money, from small stocks.
If you’d like to learn about the specific companies Sam is recommending you buy for turbo-charged stock returns, take a 30-day trial of his small-cap investment advisory Australian Small-Cap Investigator here.But that’s not where Sam’s talents end. From discovering the Apple 2e and Macintosh in the mid-80s, to the rise and fall of the Mini Disc in the 90s…to building internet apps in the 00s...Sam is an amazing talent at finding new, cutting edge technologies and translating that research into how the future will look — and where the opportunities lie.It’s his job to trawl the world to find, analyse, research and — in the right situation — recommend investments in the world’s most innovative and technologically advanced companies.He recommends the best ones he finds in his breakthrough technology investment service Revolutionary Tech Investor.This revolutionary investment advisory is dedicated to finding the best ways to profit from technological developments across the globe. If the best action is in Australia, Sam will find it. If it’s in Silicon Valley, Frankfurt or Tokyo, Sam will find it there too.To find out more about how Revolutionary Tech Investor can help you profit from breaking developments in the tech world click here to take a 30-day no-obligation trial today. Official websites and financial e-letters Sam writes for: (You can find a list of recent articles written by Sam at the bottom of this page.)

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