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Tariffs, budget cuts, better off playing Yahtzee!

  • Writer: Christopher Lakian
    Christopher Lakian
  • Feb 19
  • 2 min read

The new administration is thirty days old, and I can't figure out what Trump administration wants to do while in office.


The executive office clearly wants to cut budget waste, and growth plans rest with the Master of Chaos, President Trump. How much the executive branch can slash is unclear before they make a mistake, is anyone's guess. Elon Musk and DOGE are playing Wack-a-mole with our federal government, and it's making many people very upset very quickly. It makes some interesting headlines, but reforming oversized agencies requires congressional help.


Congress plans to reduce the federal budget over time, but the details are murky. The only thing I know for sure is that it will be done using reconciliation, a deficit-neutral process that allows financial bills to pass through the House and Senate with a 51% vote.  I hope Congress realizes you can't cut a trillion dollars out of budget and expect the private economy to soak it up instantly; it will take time for people to get hired. Companies will lose contracts and secondary contracts and need to re-configure business models, etc. If this reduction is done slowly over four years or more, it would set us on the right path to financial sanity. Aggressive cuts would lead to a big problem very quickly.


To the point,


How many companies in the United States have exposure or secondary exposure to significant budget cuts is difficult to process. In addition to this new unknown variable, a lot of companies are experiencing uncertainty with tariff’s and where policy stands.


If you are a financial professional, you want certainty that the investments you select are financially sound with a good business model. So, how do you allocate capital when uncertainty exists?


One idea that is beginning to rise quickly on my STARMINE software are international equities. Companies in Germany, Japan, Korea, the Philippines, and the UK,  look promising.


I am somewhat reluctant to dive in the deep end headfirst!

In my experience, it has been hard to want to invest a lot of capital abroad when the returns over the last 16 years have been a snore: wasted capital and wasted time, and the returns inside the USA have been stellar.


This time may be different


one thing is for certain! People gravitate to what they know is true and avoid what they don't understand.

I should have a list of companies and options for discussion very soon. 


Cheers

 Chris

 

 

Christopher R Lakian

Owner, Portfolio Manager, AIF

 

Magnetic North Financial LLC

1156 Bowman Road Suite 200

Mt Pleasant SC 29464

Main Number: 843-353-0313

Cell: 843-737-6060

Global Relay Secure Text: 843-428-7827

 

 

OneSeven ("OneSeven") is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training. All titles listed for individuals associated with Magnetic North Financial represent the individual's role with Magnetic North Financial, and not their role with OneSeven. Services are provided under the name Magnetic North Financial, a DBA of OneSeven.

 

 

 
 
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OneSeven ("OneSeven") is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training. All titles listed for individuals associated with Magnetic North Financial represent the individual's role with Magnetic North Financial, and not their role with OneSeven. Services are provided under the name Magnetic North Financial, a DBA of OneSeven.

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