Robert Johnson attended Warren Buffett's most recent Berkshire Hathaway shareholders meeting, and on the flight out to Nebraska he was pleasantly surprised to learn that the book he had authored, Strategic Value Investing, had landed on the Oracle of Omaha's recommended-reading list.
Credentials established, Johnson, who is also the president of the American College of Financial Services in Bryn Mawr, gave us his outlook on which sectors of the economy might come out ahead under a President Trump, and which under a President Clinton. (Bernie Sanders didn't enter his stock market calculus, according to Johnson.)
Oddly enough, he said, "many more on Wall Street support Clinton over Trump, because business doesn't know what a Trump presidency would mean for the economy. And markets hate uncertainty."
Under a President Trump, Johnson sees more mergers-and-acquisitions deals, as "there's a backlog due to the current antitrust climate. Note that the Office Depot-Staples merger was blocked under Obama."
"The regulatory climate for M&A would be more conducive under Trump, and investment bankers would likely benefit, as well as tech companies like Apple sitting on huge cash piles."
Coal, natural gas, and oil would benefit from a Trump presidency, Johnson said. "He's much more pro-traditional energy sources, whereas Clinton got into trouble in West Virginia with coal miners."
If you take Trump at his word, "it will take a lot of cement to build that wall. Cement and private prison firms would make more money to enforce immigration statutes."
However, if Trump is elected in November, "we'd likely see a short-term decline in the stock market. It's that uncertainty again, as we don't know what he's going to do."
Under a President Clinton, large-cap pharmaceutical companies could sell off, he said.
"A Clinton victory puts more pressure on Big Pharma. Hillary came out last September and said she would crack down on 'outrageous price gouging' by drugmakers," Johnson noted.
If Clinton hiked the minimum wage, fast-food companies could also sell off, but consumer-staples stocks could benefit.
"If the minimum wage rises, that puts more money in the pockets of lower-income individuals. And a large percentage of their expenditures in that socio-economic class are food and beverages."
Alternative-energy companies, such as solar, wind power, geothermal and hydropower, might benefit over traditional energy, he said.
Also, gun and ammunition makers "would flourish under Clinton because of fears she would pursue gun-control initiatives," Johnson said. "Smith & Wesson would silently cheer a Clinton win. It would be good for their business."
Johnson contended that hospital stocks would benefit under Clinton, who would likely expand the Affordable Care Act. And finally, aerospace and defense stocks would likely rise.
"She's more hawkish than Obama, whereas with Trump we just don't know," he added.
Personally, Johnson invests in the following way: "I'm 58, and I'm 100 percent in equities, about half in S&P 500 index funds, 10 percent in international index funds, 30 percent is in Berkshire Hathaway stock, and 10 percent in individual stock holdings."
Would he change anything in his portfolio ahead of the election?
"Not a thing."