Investors who called the subprime mortgage crisis, as chronicled in Michael Lewis’s ” The Big Short ,” revealed how they are now navigating the volatility surrounding the U.S. presidential election and their top investment picks. Porter Collins and Vincent Daniel, partners of Seawolf Capital, and Danny Moses, founder of Moses Ventures, shorted collateralized debt obligations and made millions profiting from the demise of subprime mortgage loans before the 2008 financial crisis. Now, Collins cautions investors that seemingly friendly economic policies resulting from a Donald Trump reelection may bring unintended consequences. “Some of Trump’s policies … lower taxes and lower dollar … the problem with that is that doesn’t really mean low inflation,” Collins said on CNBC’s ” Fast Money” late Monday. “He wants more tariffs, but that doesn’t really mean lower inflation as well. He wants more tax cuts. The problem is that doesn’t lead to lower deficits.” Collins revealed that he has not adjusted his portfolio based on a perceived election outcome because the fundamental themes are still in place. Moses believes investors should have a long time horizon when thinking about the country’s fiscal problems and how a new administration may react. “I care about the deficit and I care about debt. You’re not cutting taxes if we go into recession or slowing economies. It’s not going to happen. That doesn’t work,” Moses said. “So people need to think longer term about these issues other than trading stocks here.” Top picks The partners of Seawolf Capital said there is one industry that they have been particularly bullish on — shipping. These stocks typically trade on supply-demand dynamics, they said. “The demand has been very stable; the supply has actually been very poor. So as a result, the prices of daily freight rates have increased and the stocks have acted accordingly,” Daniel said. Many of these companies have been buying back their own stock as their fundamentals improve, Daniel said. One of the shipping container companies Seawolf Capital owns is Zim Integrated Shipping Services , which has rallied more than 80% this year. The Seawolf Capital partners said they also like gold, which has scored record highs of late. ZIM YTD mountain Zim Integrated Shipping shares in 2024.
