Trading the DOGE dividend

**Dave** (0:03)
Love them or hate them, Donald Trump is making good on his campaign promise to cut wasteful government spending and bureaucracy, putting Elon Musk in charge of the newly formed DOGE, Department of Government Efficiency. Elon and crew have been hard at work. Their website claims to have already saved taxpayers $55 billion. Of course, some of that controversially, because nobody wants their projects defunded or shut down. The Democrats are trying to block DOGE with lawsuits and new laws, and public criticism. But in typical Elon Musk style 4D chess, he took an idea that somebody posted on X to the president, that idea giving some of the DOGE money back to the people. And Trump agreed, saying that they're considering using 20 percent of the savings to pay down the national debt and giving another 20 percent of it directly to Americans in what is being called a DOGE dividend. And it's kind of brilliant to quiet the haters while you're also increasing the approval rating for DOGE and watching that skyrocket. And at the same time, making it not a good look for Democrats to keep fighting DOGE, which wants to give the money back. And in doing that, you're going to stimulate the economy. So will there be another stimulus rally in the stock market? And which stocks are at risk of being defunded by DOGE? Today on Dumb Money, the winners and losers are going to reveal our DOGE dividend stock trades. This is Dumb Money Live.
Hey there, Dave here along with Chris and Jordan. We are Dumb Money. Welcome to Dumb Money Live. Quick reminder to smash the like button for the almighty YouTube algorithm and the algorithm of whatever platform you're on right now. Chris, Jordan, we've already seen some big moves on stocks related to government spending. When the White House announced the Pentagon needs to plan to cut the defense budget by 8% annually for the next five years, we saw Palantir stock immediately drop 20%. It has been coming back and we can talk more about that stock specifically in a minute. But big picture here. What does a DOGE dividend look like? Does it trigger another stimulus rally?

**Chris** (2:01)
Well, I'll tell you what a DOGE dividend looks like. If we actually trust the $55 billion claim in savings, which I think is dubious at best, that if you divide the 20% promised dividend among 120 million taxpayers, you're talking like $90.

**Dave** (2:19)
I'm glad someone did the math on that.

**Chris** (2:23)
So the math ain't math. If you want to get into the four figures and the low four figures, you've got to get to a trillion dollars in cuts, and I don't see that happening anytime soon.

**Dave** (2:33)
Well, wasn't Elon's whole plan $2 trillion in cuts though? So if we get halfway to Elon's...

**Chris** (2:37)
Yeah, so if it gets there, then the math then turns to about a $2,000 dividend per taxpayer, which would be significant, but I mean, that's a pretty big ask, especially with the tax plan that they're looking to pass.

**Jordan** (2:50)
I thought it gets up to $5,000 at $2 trillion.

**Chris** (2:53)
No.

**Jordan** (2:53)
If it's $5,000.

**Chris** (2:54)
About $2,000, $2,500, depending on the... That's just an estimation on the number of taxpayers, so if there's 120 million taxpayers, then no, it's like $2,500.

**Dave** (3:04)
And I was trying to find where that $5,000 number came from. It didn't come from Elon, I don't believe. It didn't come from Trump. Trump said 20%, but I think people did the rough math and who knows, number of Americans or number of tax payers or number of tax filers because a joint return would be a single tax return. Like there's a lot of numbers you can find by.

**Chris** (3:27)
So it's just rough math, but let's say it's 60 million. At that point, it takes 2 trillion to get to 5,000.

**Jordan** (3:33)
Yeah, and it could have been households. I think maybe 5,000 was per...

**Chris** (3:37)
But that would take, I mean, that would literally take 2 trillion cuts and the 55 billion seems inflated anyway. So I don't know. Maybe they get there.

**Jordan** (3:45)
Well, so you could look at this a couple of different ways. One, who would benefit under a DOGE dividend, which is kind of seems like it's likely to happen, but it might be much smaller than people anticipate. You have to go back to the last time we had government money, and just you can't overthink it, right? So like, all right, let's just say this. We can debate how people would spend their money differently this time. But as investors, what actually matters is how the market thinks they're going to spend their money. And you know the market is going to go back to last time and front run the same exact stocks and sectors that benefited from the last government handout. So initially, it doesn't matter what you think. It matters what everyone else thinks.