Can you think of a worse choice to manage money than a federal government bureaucrat?
It’s hard enough for professional money managers to beat the market. In 2025, nearly two-thirds of active mutual funds underperformed their benchmarks. These highly educated men and women spend all day watching the markets and analyzing stocks. So how do you think a federal employee is going to do?
It’s an important question because in the past year, the federal government has begun taking large stakes in public companies.
When it has taken equity in a company in the past, it was as part of a bailout package, such as when General Motors was saved during the global financial crisis.
The government’s moves in the past year are unprecedented in that they are not part of any rescue plan.
The Trump administration has taken what could amount to a 15% stake in rare earths company MP Materials (NYSE: MP), a 10% position in Intel (Nasdaq: INTC), and a 5% stake in Lithium Americas (NYSE: LAC), a small cap company with no revenue.
The government also has a 10% stake that could grow into as much as 17.5% in Trilogy Metals (NYSE: TMQ), another small cap company with no profits and virtually no revenue.
There are several other companies in which the government is a substantial shareholder.
These positions go against everything American-style capitalism stands for.
Legally, shareholders with more than 5% stakes in companies can become activist shareholders, which often claim seats on the board of directors, pressure CEOs to step down, force management to sell assets (or even the entire company) for short-term profits, etc.
I have no quarrel with a private investor deciding to invest a meaningful share of their limited capital, accumulating a large stake in a company, and then demanding change.
I have a tremendous problem with the U.S. government, with its unlimited supply of capital, buying as many shares of a company as it wants. Companies are run for the benefit of their shareholders, not to execute political agendas – which is what will surely happen when the government is a large shareholder.
If the U.S. government owns a big percentage of MP Materials and another rare earths miner is applying for approval to operate, will the government officials make the best decision for the American people… or for the share price of the government’s investment? How about awarding contracts?
This is an anti-competition policy, plain and simple.
Lastly, the United States government’s finances resemble those of a newly divorced degenerate gambler.
Check that – a newly divorced degenerate gambler’s finances would be a major upgrade.
Do you want the folks who allowed the government to get into such horrific financial shape making investment decisions and telling CEOs how to run their (previously) independent companies?
In 2023 and 2024, the federal government bought oil at prices in the low-to-mid-$70s in order to replenish the Strategic Petroleum Reserve (SPR). Where were they in 2020 when oil prices fell so hard they briefly went negative? We had the opportunity to replenish the SPR at the lowest price in decades. And the government did nothing.
It was a no-brainer. The SPR could have been filled to the brim instead of being where it stands now, which, as of last week, was a little more than half-full. Once 172 million more barrels are released, as ordered by President Trump, the SPR will only be filled to one-third capacity.
Should a real energy crisis emerge – not just gas getting too expensive – we will not be prepared to address it. But we could’ve been if someone in the government had thought to buy oil at $20 or $30 a barrel.
And now these same dunderheads are going to manage America’s stock portfolio?
If this drives you as nuts as it does me, contact your representative and senators and tell them to get Washington to help American businesses, not invest our money in them. If we think a stock is a good investment, we’ll do that ourselves.