California-based Anthony Ginsberg of ETF house GinsGlobal has been on the money in his insights ahead of and after the US presidential election. In this upbeat interview with BizNews editor Alec Hogg, he explains why it is not too late for laggards to participate in the fresh bull run for US stocks, particularly in the tech sector. Among the reasons for the US economy – and stocks – benefitting is pent-up demand for corporate actions and accelerated cuts in interest rates.
Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.
The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here.
Watch here
Listen here
Extended transcript of the interview ___STEADY_PAYWALL___
Alec Hogg (00:10.798)
Well, what a week it’s been. Anthony Ginsberg has been tracking the markets and the influence that the U.S. election has had. We spoke to him last in L.A., that’s in California. Now we’re catching up with him in London, the day after the big election. He’ll be giving us some insights into why we saw some of those shares going so strongly yesterday: Tesla, the banks, Palantir—wow.
Alec Hogg (00:43.468)
Anthony, always good to be talking with you, and particularly now. You told us that if Trump were to win, the market would love it. My goodness, that was perhaps even an understatement.
Anthony Ginsberg (00:56.859)
Absolutely, Alec. We saw a record 1,500 points yesterday on the Dow Jones, and actually a historical record on the S&P 500. It’s never risen this much the day after election day. So the S&P was up about two and a half percent—almost three percent, actually. The small-cap Russell was the big flyer, going up almost six percent, Alec. But for the Dow to gain 1,500 points—we haven’t seen that kind of gain in over two years. So, a big rally on Wall Street. I don’t believe it’s just a relief rally; I think it’s going to have extended legs. There’s been an overhang with the Federal Trade Commission and antitrust rules. Many felt the Biden-Harris administration overreached, clamping down on M&A activity and private equity. So we see the tech industry in particular being one of the main beneficiaries going forward.
Alec Hogg (02:04.536)
Well, GinsGlobal is focused on the tech industry. You’ve made it your area for your ETFs. You did mention that a number of acquisitions were put on hold because of the Biden-Harris administration’s policies. These might be released now that Donald Trump is coming in. Could you provide more detail on which acquisitions might go ahead?
Anthony Ginsberg (02:28.281)
Yes.
Anthony Ginsberg (02:34.085)
First, the White House actually took Apple and Google to court over antitrust litigation. Some of those lawsuits will probably be dismissed now. For example, they were trying to break up Google’s search engine monopoly. So, many big firms, including Microsoft, have been blocked on acquisitions. It took Microsoft nearly three years to get the Activision gaming deal through, which was the largest tech deal in the last couple of years. We expect a lot of mid-cap and smaller-cap companies in the cybersecurity and cloud computing space to resume M&A activity. Instead of acquiring entire companies, they’ve done licensing deals or royalty agreements. So, we expect a significant pickup in M&A across the board, particularly in AI, cloud, and cybersecurity.
Alec Hogg (03:48.29)
You have a fleet of exchange-traded funds across the tech sectors. What would be your favorite now in the new Trump Mark II trade?
Anthony Ginsberg (04:01.65)
We actually have a number of regular global equity index funds as well—about 20 different products, Alec. But on the tech-specific side, cloud is a standout. In the last two weeks, big tech earnings showed Microsoft up 33% in cloud, Google up 35%, and Amazon trailing at around 20%. So, we still see strength in the cloud space, especially in hyperscalers that acquire more data capacity. This is where algorithms and AI are outsourced, and they’re the big spenders on Nvidia chips. We’re also positive on Nvidia, and wouldn’t be surprised by major tech mergers involving companies like Nvidia and possibly Intel. The big tech firms are all looking at acquisitions. Once the Federal Trade Commission head, Lina Khan, is out, the litigation burden will be lifted, creating relief in Silicon Valley. So, we expect Microsoft, Google, Meta, and others to look at acquisitions, especially in cloud, cybersecurity, and AI.
Alec Hogg (05:50.744)
So the targets of those acquisitions would see the biggest uplift. But reading between the lines, the Magnificent Seven might also be a good place to invest now.
Anthony Ginsberg (06:05.689)
Yes, because they’re finally freed from this burden. Litigation has hampered Google, Apple, and even Microsoft, which has led to a relief rally. There’s also a bigger picture. Trump’s trade wars with China and possibly Mexico mean more need for automation in U.S. factories, especially in the auto sector. He’s even claimed credit for halting the largest potential Mexican car plant. So we foresee more onshoring, which will increase the demand for robotics. We have eight different themes in our tech ETF, with robotics, cloud, AI, social media, and cybersecurity as the top sub-themes.
Alec Hogg (07:17.934)
I had a chat earlier with the CEO of Sappi. Sappi is building a $400 million plant in Maine, called Somerset. Other South African companies heavily invested in the U.S. include Sasol in Lake Charles, Louisiana, and Sibanye-Stillwater, which has its Stillwater palladium operation. Is this Trump victory likely to benefit American subsidiaries like these?
Anthony Ginsberg (08:08.763)
They’ll likely avoid sizable tariffs—anywhere from 20% up to 100% based on Trump’s rhetoric. I think this is a game changer for onshore manufacturing. Many car companies like Mercedes and BMW have already established domestic manufacturing bases in the U.S. South Africa really needs to focus on trade, as the Republican Party is more transactional. The South African ambassador should concentrate on trade because Trump’s administration is less interested in political issues and more focused on deals.
Alec Hogg (09:42.446)
What about immigration? For example, more than 20,000 South Africans work in U.S. agriculture. Are they likely to face tougher conditions now?
Anthony Ginsberg (10:19.38)
Legal immigration, such as work permits and H1 visas for skilled workers, probably won’t change. Trump’s focus is primarily on illegal immigration. The coastal elites on the East and West Coasts have been shocked by Trump’s victory, while many people in the Midwest are focused on job security and inflation. There’s been a distortion in media coverage, which doesn’t always reflect Trump’s popularity in Middle America.
Alec Hogg (12:57.942)
You follow Elon Musk closely. In the last election, he supported Joe Biden but switched to Trump this time. What motivated that shift?
Anthony Ginsberg (13:17.829)
Elon Musk is likely to become an efficiency czar in Washington, helping Trump reduce the federal budget. This would benefit SpaceX and Tesla with more government contracts and subsidies, especially for EVs. Starlink, for instance, was praised for its role during recent hurricanes. Trump admires Reagan’s approach to reducing government size, which resonates with Musk and other Silicon Valley leaders who are frustrated with excessive regulations and litigation under the previous administration.
Alec Hogg (15:18.53)
After Trump’s win, the market saw a big bump. Do you think this is just a relief rally, or could it be the start of a renewed bull market?
Anthony Ginsberg (15:37.359)
Yes, I think it could be the start of a bull market. The recent earnings beat expectations, and there’s a tailwind from anticipated rate cuts and less regulation. The Russell 2000, made up of small-cap U.S. stocks, surged nearly 5.8% yesterday. Small-cap stocks benefit most from lower interest rates and less red tape. So, we believe 2025 will be a very good year for the equity market.
Alec Hogg (16:32.342)
And thereafter?
Anthony Ginsberg (16:34.875)
Long-term growth is bolstered by AI and productivity improvements. For example, over $50 billion has already been spent this year on AI data centers, which boosts GDP. We saw nearly 3% GDP growth for the third quarter, and 2025 could see similar growth. That’s impressive for the U.S., and South Africa could benefit by focusing on trade with the U.S., especially given the new administration’s emphasis on business and trade.
Alec Hogg (18:14.054)
Some investors may feel they’ve missed the run in tech stocks. If starting now, would you still recommend investing in U.S. tech?
Anthony Ginsberg (18:48.195)
Absolutely. Even if you came in 24 hours ago, our tech ETF would be up almost 4%. This AI boom is a big game dominated by the Magnificent Seven for now, but we see a broadening market. We equally weight our tech holdings across 120 companies, with an average PE ratio around 19 times, offering a balanced way to invest across multiple themes like AI, cloud, and cybersecurity—not just the Magnificent Seven.
