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The first and third richest men in America couldn’t be wrong on what a Trump Presidency would mean, could they?

Buffett and Gates can't be wrong on Trump as he boosts my confidence!

Peter Switzer
30 January 2017

By Peter Switzer

The first and third richest men in America couldn’t be wrong on what a Trump Presidency would mean, could they? In case you missed it, they also had good news for the students of Columbia University about the outlook for the USA under Donald Trump.

It also came as the ‘enfant terrible’ of US politics made the move I always wanted to see: he backed down on one of his election promises on the advice of someone who knows better!

In a surprise move, Mr Trump said he was giving his Defence Secretary, James Mattis, power to "override" his views that torture, such as waterboarding, is OK and effective.

"I don't necessarily agree," the new US President said. But he says Mattis "will override, because I'm giving him that power".

These moves are potentially showing us what a President Trump might turn out to be. With the deft touch of a brilliant salesman and entrepreneur, not only can he make some crazy promises that the US electorate bought, he can also sell the re-working of a promise.

John Howard did it when he informed us about core and non-core promises. As if from an episode of the US TV comedy series VEEP, journalists in Washington nowadays are actually referring to “true facts”!

The capacity of Mr Trump to break or re-work promises means, provided he gets some good advice, that he has the ability, hopefully, to sell it to the people who voted for him.

It comes as the weekend’s revelation on US economic growth looked a little worrying, with the December quarter coming in at 1.9%. That’s down from 3.6% in the previous three months!

Should we be worried? On one level we should, given the problem for US growth was a bad trade result and the President has some objectionable trade policies. Against that, there was a bright spot that business investment or spending was on the rise.

It was happening before his win but with Trump promising lower taxes, less regulation and plenty of infrastructure spending, it will encourage more outlays from business.

Adding to my optimism is that if wiser heads can come up with a better trade policy, then maybe, just maybe, Donald will buy and then successfully sell this to the American people.

This back down or U-turn has boosted my confidence that the stock market optimism shown since the US election about Trump hasn’t been misplaced.

I reckon Microsoft’s Bill Gates and Berkshire Hathaway’s Warren Buffett talking up the US, now under Donald’s command, are additional reasons for believing in the good old USA and its beloved Wall Street, with its support for what the new President means for business.

Over the weekend, Reuters reported that Warren Buffett, arguably the world’s best investor, said: "I am confident that America will move ahead."

Then Bill Gates said “The desire for innovation and support for research are ‘strong’ and ‘largely bipartisan’, despite differences on how to accomplish and fund both.”

In case you were wondering who the richest of the two is, Forbes says Gates is worth $US75 billion and Buffett is worth $US60.8 billion.

Of course, being rich and being successful in business, as Gates and Buffett have been, doesn’t mean you can guess what happens to US economic growth but I love the latter’s take on the US and investing.

He says it’s hard to correctly guess the stock market in the short term but over 10 years, he never underestimates America. As the world’s biggest economy, with its stock market the most important on the planet, I suspect even Donald Trump won’t change the history of the USA.

Remember this from Buffett: "It's never paid to bet against America. We come through things, but it’s not always a smooth ride."

I tell my clients, readers, listeners and viewers that the smart investor places his ‘bets’, which really are investments for the long term and that you should always put your money on reliable conveyances.

That’s why I invest in dividend-paying stocks of companies that have a great history of growing their dividends.

I’m hoping this first broken promise of Donald’s is the one that the world had to have. Let’s hope we see Donald manage a few more before his time is up.

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