Don Luskin likes what he sees. The economy, he says, is strong and poised for growth. The tax cuts are working, particularly in the small cap segment. Furthermore, the President’s approach to trade negotiations is sound. In short, Keynesian animal spirits for risk are back and the future looks bright. But, he adds, “Don’t be an idiot about it. Like in a plane, you always want to know where the exits are.” The Chief Investment Officer of Trend Macrolytics recently visited our Southern California studio for a wide-ranging discussion on politics, central banks, trade wars and markets. It was my first opportunity to sit down with the author and columnist, who is also a regular on Fox Business Network. For starters, there is no mistaking it: Luskin is an uncompromising stock bull. The economy, he insists, “… is in a cusp period, where the world has the potential to get out of the era of secular stagnation, and the new normal, and get back to growth rates and productivity rates that look like the old normal.” He is also not shy about his support of the President’s economic policy and, in particular, tough stance on China and trade. “China is interfering with free trade more than we are,” he explains. In Luskin’s assessment, the pros of Trump’s tough stance outweigh the cons, even if the tactic means higher consumer prices for Americans. “[Free trade is] the morally right thing to do,” he adds. Yet, despite his unwavering optimism, when pressed, Luskin concedes that diversification is a worthy end in itself. Don’t be an idiot about it — remember the plane analogy? But what if the nearest exit is behind you — like at Dow 26,000? “Believe me … I own lots of gold,” he admits. “I also have lots of guns and ammunition … and penicillin.” After all, what good is an exit without a parachute? To watch the video interview with Donald Luskin, chief investment officer of Trend Macrolytics, click here. To download the Trend Macro special report, “One Sell-Off, So Many Causes” click here (pdf) Read in browser »
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