“With Donald Trump’s inauguration a day away, investors are scrambling to ensure that their portfolios are best positioned to thrive under what’s expected to be the incoming administration’s new economic policies,” Ryan Vlastelica reports for MarketWatch. “While banks and industrial companies have been particular trading favorites, Goldman Sachs is looking less at industries and more at how companies spend their money.”
Vlastelica reports, “The firm’s advice: Buy companies that don’t spend a lot on salaries, and which pay a lot in taxes. Both qualities, the investment bank wrote in a note to clients published late Wednesday, are poised to outperform in the economic environment, with the former avoiding a cost as wages rise, while the latter has the most to gain from the massive tax cuts Trump is expected to pursue.”
“The investment bank created a ‘basket’ of securities with higher tax rates, the median stock of which had a 10-year median rate of 38%, compared with 31% for the median component of the S&P 500,” Vlastelica reports. “Technology companies, which tend to have fewer employees than other industries, were again the most heavily weighted sector in the basket, comprising 26% of the total. The components include Apple Inc., Skyworks Solutions Inc., and Qualcomm Inc.. The implied labor cost of Apple, as a percentage of its total revenue, is 2%, while it is under 1% for the others.”
Read more in the full article here.
MacDailyNews Take: Makes more sense than the readings of the entrails performed by the technical analysts.
SEE ALSO:
A huge new rally could be in store for Apple – January 19, 2017
Apple to release Q117 earnings, webcast live conference call on January 31st – January 18, 2017
Greenlight’s David Einhorn: Own Apple to be well-positioned for Trump presidency – January 18, 2017
May as well follow their advice, considering Goldman Sachs has taken over the Trump administration already. They know better than most what policy is going to be.
By essentially owning both corrupt political parties, Goldman Sachs has been the USA’s defacto administration since 2000.
You would have to be a fool to believe that Trump’s bombastic rhetoric while he appoints wolves to guard the henhouse.
Wow I keep hitting the wrong tab and going int Trump Daily News instead.
Like it or not, the U.S. President holds tremendous sway over Apple and MDN should (and does) cover it. There’ve been plenty of Obama articles here, and Bush article before that, which involved Apple.
Yeah but it’s been clear the owner of MDN is a partisan right wing hack.
I bet that there are some people in Europe currently choking on their muesli over the claim that Apple is a company that pays a lot in taxes.
Its not about how much taxes they pay, its about who gives more money to the lobbyists and cabinets’ foundations.