Nov. 14, 2016

Dear investors,

Unlike many pollsters and pundits, we thought Donald Trump had a good shot at winning the presidency. So good, in fact, that we put our money on it. And yours.

We are delighted to say that the first week of Trump Risk Ultimate Momentum Portfolio Trades, LLC (“TRUMP Trades”) was all about winning. We made all the best trades.

Our portfolio is an equal-weighted basket of the dozen trade ideas we detailed in our prospectus last month. We opened positions in these stocks, currencies, and commodities on the day before the Nov. 8 election. In the week since, our performance has been nothing short of tremendous. Incredible growth. Huge returns.

Over the past five days, our portfolio has gained 14%, crushing the 1.2% performance of the S&P 500—which is for losers—over the same period. Annualized, that’s a 70,000% return (give or take).

Performance summary

Our stock picking has been amazing. Investments in private prison companies are paying off handsomely: CoreCivic (+48%) and GEO Group (+34%) are leading our long positions, up in anticipation of bumper business related to detaining undocumented immigrants. Our top short idea was gun stocks, specifically Smith & Wesson—as fears of stricter gun control under a Democratic administration recede, the company’s shares have plunged by nearly 20% (in our 50% margin account, that’s good for a 35% return).

Magal Security Systems (+16%), a Nasdaq-listed wall-building specialist from Israel, has rallied for obvious reasons. Our bet on Descartes Systems (+5%), a Canadian company that processes security forms for cross-border trade, is shaping up to be more of a slow-but-steady earner, as Trump gradually tightens trade restrictions.

Sector-wise, we totally nailed it. A freer hand for pharmaceutical firms pushed up the Nasdaq Biotechnology ETF (+11%) and the coming boost to military spending did the same for the iShares US Aerospace & Defense ETF (+9%). We sold short oil companies, which hasn’t been as big a success, but we’ll take a 3% gain betting against the S&P Oil Exploration and Production index.

Currencies and commodities have been more of a mixed bag. Our top currency trade, going long on the Russian ruble versus the Mexican peso (+8%), was always a sure thing, given Trump’s geopolitical affinities. Shorting the Korean won (+5% in our margin account) is paying off as expected; American workers can make exploding phones as well as anyone else.

Going long on the Japanese yen versus the Canadian dollar (-2%) is one of only two bad calls in our portfolio. The other is gold (-5%). We thought that the yen and gold would be useful hedges if investors wimped out after Trump’s win and flocked to traditional safe havens. In the event, the yen, gold, and the loonie have all fallen. Nobody’s perfect, but we are about as close as you can get.

Forward guidance

What’s next? We remain confident in many of our positions, but won’t rest on our laurels.

Trump’s promise to bring back heavy industry to the Midwest gives us confidence in steelmakers, the final leg of the “guns, germs, and steel” trade. For the same reasons, we’ve got our eyes on coal companies, too. If Trump can convince fiscal conservatives in the Republican-controlled Congress to go along with his ambitious, expensive infrastructure plans, anything to do with construction could produce a tidy profit. The likelihood that ex-investment bankers on Trump’s economic team will gut the onerous Dodd-Frank act is good news for big banks.

As for short strategies, we weren’t sure which way bonds would go after Trump’s victory, so we stayed away from fixed income. The subsequent rout in government bonds on expectations for higher inflation is intriguing; after such a long bull run, there may be further to fall. Trump’s robust commitment to coal and distaste for international climate treaties also makes us bearish on renewable energy. Solar, wind, whatever… if you can’t dig it out of the ground, sell!

In conclusion, we appreciate your continued support of TRUMP Trades, and take our fiduciary duty to investors seriously, in that we’re serious about making investors money. Normally there would be some guff here about how past performance doesn’t guarantee returns, but that stuff is for wimps. Our fund will make America’s wallets great again!