Should I Buy Truth Social?

“Should I buy Truth Social?” A colleague asked on behalf of a friend. If I were a little more like Jesus, I’d probably answer this question with another question, like, “Why do you think DJT (Nasdaq’s symbol for Trump Media & Technology Group) is a good investment?” Patiently guiding the questioner towards a better question. Subtly pointing out you can’t buy Truth Social. It is owned by DJT. Gently suggesting they weren’t asking from the perspective of a long-term investor. Instead, my face took on a look of disbelief as I blurted out a less encouraging question: “Do they have any idea what they’re doing?”

Today’s blog is an encouragement to invest for the right reasons and an admonition to be careful when mixing politics with your portfolio.

God owns it all, and the assets He entrusts to us are for our long-term welfare, joy, neighborliness, and worship. Because we act as stewards, we have an extra burden to invest in a way likely to produce a return for the risk taken. Based on Genesis 1:27-28 and 2:15, humans are creative and designed for work. The historic wealth creation in the stock market is a testament to our role as creative problem solvers working in a resilient economic system that rewards solving challenges.

The process required to invest in individual stocks requires more effort to be a good steward. To be clear, I don’t have an opinion on whether DJT is a wise investment. I haven’t done a deep analysis of DJT. But neither have most of the people buying it. Instead, many of the buyers of this stock, now down 48% from its high last month, are likely making one of the following flawed assumptions about how markets work.

Flawed Assumption 1: The President significantly impacts stock market returns.

This hasn’t been the case. Four of the last seven presidents were Republican, and three were Democrats. Only one experienced a stock market decline, George W. Bush. Outside events and the timing of market increases, declines, and recoveries are far more impactful than the political party. [i]

Stocks did well under Bill Clinton because he happened to be president during the late nineties tech bubble. George W. Bush took over as the market sank under the weight of the technology bubble popping, 9/11, and Enron. He left before markets recovered from the financial crisis. [ii] Those factors are more important to markets than who is boarding Air Force One.

Flawed Assumption 2: I can make a quick buck by buying the stock and selling it to the next person.

Some people buying DJT are buying because they expect to make a quick buck by selling to someone trying to benefit from the election (Flawed Assumption 1) or buying a stock as a new way to support their candidate. When those buyers step in, the short-term speculator assumes it will increase the price.

Pursuing a quick buck is the casserole of flawed assumptions. Add two cans of pride, a cup of greed, and a teaspoon of gambling, mix it, and zap it in the microwave. It rarely turns out well. Assuming you can outsmart everyone else is very prideful. James 4:6, referencing Proverbs 3:34, warns, “God opposes the proud but shows favor to the humble.” Proverbs 13:11 counsels, “Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.”

Whether you buy DJT or any other stock, ensure you act as a good steward. Your stewardship journey is like a long trip. Trying to drive faster might get you there a little earlier, but a few wrong turns or a traffic ticket can set you back much further than a quick buck will help.

[i] The stock market's performance under Biden is now better than under Trump. But a big factor is COVID's toll in 2020. | Morningstar

[ii] Stock market performance by president, from Reagan to Trump - CNN.com