Investing in an agenda is never as easy as it seems. Sure, grab onto an idea, throw a couple of darts... and voila! The ideas flow -- never mind how good a corporation is at executing its business, or even if that agenda has much of a chance to get to where it was intended.
On Wednesday, Jan. 20, Joseph R. Biden was inaugurated as the 46th president of these United States. Like his two immediate predecessors, one might think that this president starting out with at least two years of one-party control over the House of Representatives and very narrowly over the Senate, might have a reasonable chance to drive forward on his stated agenda.
We all know that Joe Biden won the presidency at least partially on his "Build Back Better" plan. The president has already laid out an ambitious $1.9 trillion Covid-relief package that could run into some interference in the legislature, as some in his own party have scoffed at the price tag, and no matter who leads the Executive branch of government, the opposition always seems to find fiscal religion.
That gives pause, at least in my mind, to the idea of building or rebuilding back better. An infrastructure rebuild will be costly, perhaps even more so than Covid relief. That said, there is no doubt that the nation's roads, bridges, tunnels, airports and seaports are close to, if not already in dire condition.
From Joe Biden's own website, the president, as a candidate, stressed investment in rebuilding all of the above, but doing so in a more green energy kind of way, while also mentioning improving the nation's water works, electric grid and universal (5G) broadband.
The president also aims to improve conditions for the domestic auto industry and its supportive infrastructure, in addition to supply chains as that group becomes less reliant upon fossil fuels. And on the topic of green energy, the president would also like to move mass transit toward a "zero-emission" future, not to mention getting the entire nation's power grid to be carbon pollution-free by 2035, meaning that this will be much more intense than your standard infrastructure rebuild.
Stocks To Consider
Some names come right out and say "Here I am", while others require a little detective work to find. If the nation is going to rebuild crumbling infrastructure, then earth movers are going to be in demand. That means Caterpillar (CAT) - Get Report, probably some Deere & Company (DE) - Get Report, as well as United Rentals (URI) - Get Report. In fact, I added a few shares of that last one to my own book just a little while ago.
Beyond equipment is where providers of materials come in. Such stock ideas would be Martin Marietta (MLM) - Get Report, Vulcan Materials (VMC) - Get Report, Granite Construction (GVA) - Get Report and U.S. Concrete (USCR) - Get Report. And I also want to mention another name -- Berkshire Hathaway (BRK.A) - Get Report. Why bring in the Oracle of Omaha? Two reasons. One, Berkshire is a value play, and having one of those on the book right now might be wise. Secondly, Berkshire owns a subsidiary that might be of use here -- Acme Brick, an American distributor of bricks and masonry materials -- and another that may end up helping move all of these materials and equipment from point A to point B -- BNSF Railway (formerly Burlington Northern Santa Fe).
Where next? Autos and U.S.-made electric vehicles? Obviously Tesla (TSLA) - Get Report is top dog there, but certainly do not count out General Motors (GM) - Get Report and Ford Motor (F) - Get Report. Both are making tremendous strides in aggressively pursuing Tesla into this space, and both employ a lot of union workers. The latter matters to the president.
Speaking of green energy, let's have a look at what might be hidden under the covers here. First Solar (FSLR) - Get Report quickly comes to mind, as does SunRun (RUN) - Get Report since both firms operate in the solar power/battery storage space. Moving onto Utilities, what about NextEra Energy (NEE) - Get Report? Never heard of NEE? Right now this provider of electricity only serves the state of Florida, but NEF just happens to also be the world's largest producer of wind and solar energy. The firm is also one of the largest battery storage companies in the world. That brings us to fuel cell providers like Plug Power (PLUG) - Get Report and FuelCell Energy (FCEL) - Get Report that make use of hydrogen (in PLUG's case), and biofuels (in FCEL's case) to power fuels cells that could ultimately provide green power for entire fleets of vehicles.
Also, in support of all of this interest in growing out green energy, I think maybe companies like Eaton Corporation (ETN) - Get Report, a major provider of electrical parts, and Brookfield Renewable Partners LP (BEP) - Get Report, a specialist in building hydro-electric power plants, wind farms, and solar power storage facilities, could catch a bid.
Lastly, let's look at the expansion of 5G broadband. American Tower (AMT) - Get Report provides the towers, T-Mobile (TMUS) - Get Report has the best 5G coverage across telecom and Marvell Technology (MRVL) - Get Report and Qualcomm (QCOM) - Get Report will likely provide the required semiconductors.
First things first. Before this nation can get to "building back better", the pandemic has to be defeated. This will require deficit spending upon deficit spending. There will almost certainly be opposition and in getting something done, compromise will be required. Stay nimble. Stay diversified. There is no "set it and forget it" for the "do it yourself" crew, and to be honest, I do not understand why anyone would not take the time to learn how to manage at least part of one's own wealth, no matter how small it is. Nobody is ever going to care about your future and your family the way that you do.
That said, stay up on monetary and fiscal events. Learn what policies will likely get through and what policies may not. All planned policies evolve sometimes quite dramatically from concept to implementation. Your decision making will have to evolve in real time right alongside.
Now, go get 'em.
Disclosure: I have long positions in United Rentals, Berkshire Hathaway B shares, Ford and FuelCell Energy.