There are certain stocks I simply don’t want to short.
I don’t care how expensive they look. I don’t care how convincing the bear case sounds.
And I definitely don’t care how many people on television are telling you they’re headed lower.
Some stocks come with a different kind of risk. Think about Dell Technologies (DELL). Think about Intel (INTC).
Think about companies tied to artificial intelligence, defense, rare earth minerals, domestic manufacturing, or the technology infrastructure America has decided is strategically important.
At any moment, President Trump could mention one of those companies or industries in a speech, an interview, or on social media.
If you’re short, you could wake up to a stock that’s up 10% before you’ve even finished your coffee.
I call it “Orange Swan Risk.”
You’ve probably heard of a Black Swan event. That’s something nobody sees coming that suddenly changes everything.
Orange Swan Risk is different.
It’s the possibility that one unexpected comment from the president about a company, an industry, or even the stock market can send prices sharply higher before investors have time to react.
Whether you agree with President Trump politically has nothing to do with it.
This is about understanding the game you’re playing.
Why Should You Care?
Markets don’t just move because companies report earnings. They move because investors constantly change their expectations about the future.
Sometimes those expectations change because interest rates move. Sometimes they change because a company launches a new product.
And sometimes they change because the President of the United States shines a spotlight on a company or an entire industry.
Whether you think that should happen is beside the point.
It happens.
And when it does, as Chris “CJ” Johnson and I recently discussed on MTA Live, stocks like Dell and Intel are doubling and tripling.
That’s why I think Orange Swan Risk deserves a place alongside interest-rate risk, geopolitical risk, and earnings risk.
It’s another variable investors have to consider when deciding how to allocate their money.
Believe it or not, the closest historical comparison isn’t Ronald Reagan or even Bill Clinton.
It’s Calvin Coolidge.
And that’s funny because Coolidge may have been the quietest president we’ve ever had. Trump probably says more in a day than Coolidge said in a month.
Yet they’re among the very few presidents remembered for openly talking about the stock market.
Even then, it wasn’t anywhere close to what we’re seeing today.
This is different.
We’re watching a president who regularly talks about stocks, celebrates companies he likes, highlights industries he wants America to dominate, and openly roots for higher stock prices.
Whether you love that or hate it doesn’t matter to markets.
As investors, we simply have to recognize that it’s part of today’s environment.
What Are We Going To Do About It?
This isn’t really a political strategy.
It’s a risk management strategy.
If a hurricane is headed toward Florida, insurance companies pay attention.
If the Federal Reserve is about to announce interest rates, banks pay attention.
And if the president keeps talking about artificial intelligence, semiconductors, defense, domestic manufacturing, rare earth minerals, and American technology leadership, investors should probably pay attention too.
This is also different from what I wrote last month about White House Capital.
That piece was about following the money. We looked at what Trump owns, what the government is buying, and where people around the administration are investing.
Orange Swan Risk is about something else entirely.
It’s about recognizing that some stocks have headline risk most investors aren’t accounting for.
Markets don’t wait until government money actually shows up in a company’s earnings. They begin pricing in the possibility long before that happens.
Expectations change first. Prices usually follow.
That’s why I have very little interest in shorting stocks like Dell, Intel, Nvidia (NVDA), Oracle (ORCL), IBM (IBM), Boeing (BA), MP Materials (MP), or other companies sitting in the middle of these themes.
Could they disappoint? Absolutely. Every trend ends eventually.
But there are more than 4,000 publicly traded stocks in America.
Why spend my time betting against the handful that could jump 10% because of one sentence from the most powerful person in the world?
I’d rather spend my energy somewhere else.
In fact, I’d rather turn the question around.
Instead of asking which stocks I shouldn’t short, I ask which ones I should be buying.
That’s where Orange Swan Risk becomes an opportunity.
That’s exactly how we ended up buying Dell.
And it’s one of the reasons we continue to watch companies tied to AI infrastructure, defense, domestic manufacturing, quantum computing, critical minerals, and the technologies Washington D.C. keeps telling us are strategically important.
As technicians, we don’t have to predict tomorrow’s headlines.
We don’t have to guess what President Trump will say next.
Our job is simply to recognize that this is another form of risk. Just like interest rates, earnings, or geopolitics, it deserves our respect.
Ignore it if you want.
I’ll continue treating it like every other market risk that can move prices.
Because the market doesn’t care whether we think it’s fair.
The market only cares that buyers show up.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs