The US government just shut down. Again.
Prepare to see endless headlines about mass firings. Shots of closed gates at national parks. And pundits talking about economic fallout.
It will look messy. It will sound urgent.
My thoughts?
Yawn.
This is politicians being politicians. It’s all theater. No different than the new show on Broadway (just far worse acting).
Here’s the important part…
Stocks usually RISE when the government closes!
This is not the first time Washington has “run out of money.” Since 1980, the government has shut down 15 times.
Each time, the financial press treated it as if the sky were falling.
Then a few days passed. Politicians struck a deal. And everything went back to normal. So much for crisis.
Over 70% of the time, stocks rose during the shutdown. A year later, the S&P 500 was up an average of 15.5%.
So why do shutdowns feel so menacing? Because they hijack attention.
One of Peter Lynch’s most useful lines applies perfectly here: investors lose more by preparing for corrections than in the corrections themselves. The bigger danger isn’t the shutdown; it’s you selling a great disruptor because the news cycle spooked you.
My fellow investors, the correct move is to ignore the government shutdown and focus on great disruptors.
The businesses that create real wealth don’t win or lose because a bill stalled on Capitol Hill. They win by making better products customers can’t live without.
At RiskHedge, our edge is investing in companies riding disruptive megatrends.
Businesses that compound regardless of D.C.’s mood swings.
Nvidia (NVDA) didn’t become a trillion-dollar company because Congress passed a spending bill.
Amazon (AMZN) didn’t build the world’s largest marketplace because politicians compromised on a budget.
Tesla (TSLA) didn’t pioneer EVs because lawmakers found “common ground.”
Great disruptors succeed because they build better products, win over customers, and reshape entire markets.
Their stocks rise because they grow revenues and profits quarter after quarter. Not because Washington functions smoothly. Great disruptors are largely immune to Uncle Sam’s mood swings.
The current crisis is just the latest entry on a long list of things that were supposed to topple the market but never did.
This list includes: War in the middle east… high oil prices… crashing oil prices… rising interest rates… inflation... America’s credit downgrade… tariffs… and much more.
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Yet, the Nasdaq has handed investors 470% gains over the past decade and made a new high just yesterday.
News outlets like CNBC and Bloomberg are obsessed with scary stories. That’s how they make money.
Please don’t let their obsession become your obsession. Because it’s toxic to your wealth and can cost you millions of dollars in investing profits over your lifetime.
I’m not saying financial journalists are out to ruin you. But most folks forget CNBC and others are entertainers, not stock market wizards.
It’s in the largest infrastructure build-out of our lifetimes.
AI factories, gigantic data centers, are being financed, permitted, erected, and powered at a breathtaking pace.
Big Tech’s AI spending is surging and set to remain elevated as AI workloads explode.
This year alone, big tech will spend $350 billion+ building new AI data centers. In one year, AI infrastructure spend has grown to rival the entire Apollo program or the Interstate Highway System, when adjusted for today’s dollars.
These “AI factories” are vacuuming up chips, servers, power, real estate… and enormous sums of money.
It’s no surprise most of the top ten best performing stocks this year are AI related.
That’s where investor wealth will be created. Not in the Democrats and the Republicans coming to an agreement.
Across from me sat a guy with a small note taped to his monitor. It read:
“This too shall pass.”
Shutdowns pass. Debt-ceiling fights pass. Filibusters, partisan standoffs, political theater, they all pass.
What endures are world-class companies compounding cash flows by attacking enormous problems with better, faster, cheaper solutions. That’s the RiskHedge playbook. That’s how you make real money.
Remember, the real risk isn’t the shutdown. It’s letting headlines push you into selling great businesses.
That’s our edge. Ignoring the noise. And focusing on great businesses profiting from disruptive megatrends.
There are legitimate reasons to be cautious. Bureaucrats taking a few days off work isn’t one of them.
Stephen McBride
Chief Analyst, RiskHedge
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