This commentary originally appeared on Real Money Pro on Nov. 23. Click here to learn about this dynamic market information service for active traders.
Many people are taken aback that Donald Trump would go after Silicon Valley behemoths like Apple (AAPL) and Amazon (AMZN) . My question is why has it taken so long? Washington always has some industry with a target on its back. In the 1980s it was the automakers -- for closing down factories. Michael Moore's "Roger and Me" -- fair or not -- was a complete takedown of the auto industry.
The next group to take it on the chin was the big box store, especially Walmart (WMT) . The company was making money had over fist while small towns "collapsed" due to the competition. The next target was the "greedy" oil companies -- like Exxon Mobil (XOM) , which literally apologized for making too much money in 2006. Up next was the financials who caused (but not really) the financial crisis and almost broke the economy.
Silicon Valley kills more jobs than it creates through innovation. Apple (AAPL) , which makes its phones overseas, makes more money than all of the other names on the "enemies" list combined, meanwhile outside of enriching shareholders and providing a platform to app developers, what does Apple do for anyone that doesn't live in California?
Amazon (AMZN) , with its dream of drones and outsourced driving force, is trying to take out one of the few areas one can still make a good living without a degree and still see the family at night: delivery drivers. I expect these tech names to see a huge backlash over the next few years, as the world realizes that Uber, Tesla (TSLA) , AAPL, AMZN and Alphabet (GOOGL) , while loved by the user, can easily be seen as the enemy of gainful employment in the United States. (FB, GOOGL and AAPL are holdings of Action Alerts PLUS and AMZN is a
Growth Seeker holding.)
The good news is that AGAF stocks (AAPL, GOOGL, AMZN, and Facebook (FB) ) probably won't see stock prices affected by this backlash. However, it could hamper further growth in the names -- especially AMZN and AAPL. The former will probably face antitrust issues, the latter may have to move some manufacturing of SOMETHING to the U.S. While tech has been a huge stock market leader for a decade, outside of FB, which I still think will be the most valued company in the world by 2018, I think the trade of 2017 is going to be out of tech and into banks -- especially large mid-cap names like KeyCorp (KEY) and Fifth Third Bancorp (FITB) . I think a systematic selling of puts in the SPDR S&P Regional Banking ETF (KRE) makes a lot of sense starting about now.