There have been a lot of colorful personalities in the market over the decades. One of my favorite stories belongs to the late Nelson Bunker Hunt.
Bunker was one of the many sons of the even more colorful H.L. Hunt, but that’s a much longer story for another day.
At any rate, Bunker Hunt rose to notoriety by attempting — and succeeding, for a while — to corner the silver market in the late 1970s early ‘80s. At one point, Hunt and his brother were believed to own as much as half the world’s transportable supply of silver.
It didn’t last.
Alarmed by the bubble in silver prices in 1980, the Federal Reserve ordered brokers to stop lending money to purchase silver.
The market cratered.
Hunt’s losses were estimated at $1.7 billion. In the fallout, Bunker ended up declaring bankruptcy.
Hunt responded to the loss of his fortune with a shrug: “A billion dollars isn’t what it used to be.”
Now, I don’t care what Hunt says. A billion dollars is still a lot of money.
And at $1 trillion — $550 billion of which is new spending — the leaner infrastructure bill is still a massive amount of money.
And this says nothing of the potential second piece of legislation worth another $1.8 trillion.
We’ll just focus on what we know for now.
Infrastructure Bill: A Breakdown
Rome wasn’t built in a day. All $1 trillion included in the new infrastructure bill won’t get implemented in a day either.
This will be a series of multi-year projects. It’s an investable trend for years to come if you know where those dollars are going.
So, let’s do a deeper dive, focusing on that new $550 billion in additional spending.
More than half of it, at $284 billion, will go into transportation:
- $110 billion will go to repair or improve bridges and roads.
- $66 billion will go to improve passenger and freight rail.
- $39 billion will go to public transit, such as buses and subway systems.
- $69 billion will be split up among airports, ports and waterways, green school buses and electric vehicle charging stations.
Remember, this is new, incremental money. There was already a good chunk of federal money being spent on most of these. Local governments and the private sector chip in their fair share as well.
Apart from transportation, another $65 billion will go to broadband, $65 billion more will go to upgrade the power grid, $55 billion will go to water and wastewater projects and $47 billion will be in “resiliency” investments aimed at making our infrastructure safer and less susceptible to natural disasters or even cyberattacks.
How to Invest After Biden Signs the Bill
We’ve known this was coming for a year now. We didn’t have the exact amounts, but we knew that an infrastructure bill was coming. We also knew it would be one of the largest we’ve seen in decades. Naturally, we wanted to get in front of it.
President Joe Biden is expected to sign the bill today.
If you want broad exposure to infrastructure stocks, check out the Global X U.S. Infrastructure Development ETF (NYSE: PAVE). It’s up 37% year to date. Click here to read more about PAVE’s holdings in my ETF X-Ray.
We’ve been following this trend for a while now…
Last year, I recommended a leading maker of steel rebar in my premium research service Green Zone Fortunes. My readers are up over 84%. In October of 2020, I recommended a heavy construction company that is now up over 74%. And earlier this year, I recommended a maker of sophisticated power grid systems. My readers are up over 25% in less than five months.
Those three stock recommendations aren’t in my buyzone currently, but it’s proof that this is a profitable trend that should only continue as more money enters the space.
We’re on top of this. I believe the bull market in infrastructure-related stocks is just starting.
And infrastructure stocks are only part of the Green Zone Fortunes model portfolio. To find out how you can gain access to all of my stock recommendations, including multiple stocks that are part of my No. 1 stock mega trend of the next decade, click here.
To good profits,
Adam O’Dell
Chief Investment Strategist