DJT Stock and The Trade of a Lifetime
Banyan Nation,
Sir John Templeton was one of the greatest investors in history.
Among the financial writing crowd, we put him on the same kind of pedestal as Warren Buffett or Carl Icahn.
Because before he even turned 30 years old, Templeton was already on the path to becoming an investing legend…
Back in 1939 — on the eve of War in Europe, and at the very end of the Great Depression — Templeton advised his broker to buy 100 shares of every NYSE-listed company trading for less than $1.
In total, Templeton invested in 104 beleaguered companies. 34 of which were already in bankruptcy!
But as World War II started heating up, American industry sprang back to life, and Templeton made a fortune.
It was truly the “Trade of a Lifetime,” buying at the very bottom before cashing out at the top.
Then, over half a century later, Templeton did it again…
After a long and illustrious career managing the Templeton Growth Fund (which averaged a 15% return across 38 years), he emerged from retirement to make another epic trade at the tender age of 88.
Witnessing what he called the “temporary insanity” of the early 2000s dotcom bubble, Templeton decided to strategically short-sell overvalued technology companies.
Templeton and his team realized that many new tech startups were compensating their executives with stock options. These stock options typically came with a “lockup” period that prevented them from being sold for a fixed amount of time (usually six months). Since these companies were all publicly traded, all this information was made available to the public by law.
So a new dotcom company would emerge making massive promises. Its shares would soar to high valuations, then the shareholders would cash out as soon as lockup expired.
In today’s crypto markets, this strategy is known as a rug pull.
Templeton spotted the opportunity and built an entire strategy around strategically shorting sketchy dotcom companies as these lockup periods expired. He raked in millions.
Fast forward to 2024, and Templeton’s lesson is etched into the minds of traders and investors all over the country.
As a result, the media has been laser-focused on Trump Media & Technology Group (Nasdaq: DJT) as we pass the lockup date for the stock’s largest shareholder and namesake investor.
We’ve already seen DJT’s shares slide over the past few months, indicating that some traders might be trying to replicate Templeton’s success by front-running some possibly massive sells…
But will Trump even sell his shares of DJT?
Or, in light of the stock’s 18% loss year-to-date, should Main Street investors consider buying shares of DJT?
This is obviously a delicate subject, and many experts have passionate political beliefs that may sway them in one direction or the other.
To get the clearest unfiltered outlook, guided by historical expertise and superior investing results, we tapped our colleagues at the Grey Swan Investment Fraternity for their insights…
This small group of experts is known for making bold predictions about the future — predictions that frequently become a reality far sooner than you or I might’ve expected. Most recently, this past March, Founder Addison Wiggin made a then-controversial prediction that Joe Biden would drop out of the presidential race … months before the President stunned the media by dropping out.
So we sat down with Grey Swan’s Managing Editor and Portfolio Director Andrew Packer to talk about DJT’s lockup period, and how it might be impacted by the upcoming election…
Q: Andrew, thanks for taking the time out to speak with us. What are your thoughts on Trump’s DJT stock and whether it represents an investing opportunity to our readers?
A: Stocks are valued, at least in part, based on the market’s perception of its future price and prospects. DJT is Trump’s personal bullhorn and he’s the majority shareholder. So if he’s inaugurated as President this coming January, that could open a lot of doors for the company.
On the other hand, DJT is already operating on a shoestring budget, as I learned when I had a chance to interview DJT CEO Devin Nunes back in early June – who by the way also predicted Biden would be dropping out.
(Click on the thumbnail above to view Andrew’s full interview with DJT CEO Devin Nunes).
And we’ve reached a point of social media saturation, where folks already have more accounts and feeds than they can keep up with. Truth Social may not grow like other platforms have in the past. On top of all that, we’ve also seen Trump return to Twitter despite having an exclusivity agreement with Truth Social.
Q: So do you think there’s an opportunity for a Templeton-style “lockup” trade by shorting the stock?
A: No, not right now. Trump’s lockup date has been widely publicized, and the market has been pricing it in for months already. Trump even specifically mentioned on the campaign trail a week before the lockup ended that he had no intention to sell.
If the insiders can sit tight, even for just a few weeks, then short sellers will likely pack up their bags and move on. That could see shares pop higher as buying demand surges. Remember, early short-sellers have already made some profits here. They may not want to see that become a loss, so they may be quick to buy shares to cover their short position.
At the same time, I wouldn’t risk underestimating Trump. Even if he wanted to sell his DJT shares, he could start by buying shares up, getting the market excited, and then dumping into the resulting momentum. Short-selling is tricky with any stock, and the options premium on DJT is through the roof.
Q: It sounds like the mainstream media is once again focusing on a “Nothingburger” of a topic, then?
A: The media needs viewers and eyeballs on web pages. And whether you like Trump or not, you can’t argue that he’s great at grabbing headlines and creating media cycles. Whatever keeps their advertisers happy, I guess.
The truth can be a little more unsettling, to be honest. Because regardless of who’s inaugurated in January, America is inevitably going to cross a critical threshold at the 130% debt-to-GDP ratio at some point in the next 1-3 years. Historically, we’ll say that’s been a very bad thing for many, many countries. You can read more about it in our latest piece HERE.
What if Kamala Wins? The 3 Words That Will Change Everything  The same team that predicted Biden’s downfall … now warns of a new threat. Learn how to safeguard your future. [Click Here] |
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Until next time,
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