We’re not in the business of political punditry at Investment U. And it’s a good thing, too. Because neither of our current major presidential candidates plans to do much for investors.

Still, there is one campaign issue worth watching. That’s the heated rhetoric about the border with Mexico.

[ad#Google Adsense 336×280-IA]The wall proposed by Trump would separate the U.S. from its third-largest trading partner.

It would impact both markets hugely. Shipping stocks that carry lots of freight between the U.S. and Mexico are especially at risk.

This creates an interesting situation for investors.

Whether you’re leaning toward Clinton or Trump, there’s a way to play this situation for some potentially huge gains come November.

Trump supporters – or at least those who believe he’ll win – should short shipping companies that move largely between the U.S. and Mexico.

Meanwhile, confident Clinton supporters would do well to buy them.

I’ll tell you the perfect play for either scenario in just a moment. First, let’s look at why Clinton supporters should consider gobbling up this stock…

The Clinton Bulls

Clinton’s border policy has gotten far less press than Trump’s. In a nutshell, she wants the border to remain porous.

She has no desire to build a wall. And she’s certainly not willing to compromise our relations with Mexico by demanding its government pay for it.

So a Clinton presidency in 2016 would be great news for shipping stocks…

Particularly Kansas City Southern Railway (NYSE: KSU).

The railroad system makes more than half of its revenue moving freight in and out of Mexico. It has been running trains between Illinois and Mexico City since the ‘90s.

So if Clinton is elected, Kansas City Southern could see a sizable postelection rally. Knowing she’d maintain the status quo of border commerce, investors could breathe a huge sigh of relief.

The company is certainly set up to survive in a Clinton-run America. It’s beaten earnings expectations for the past three quarters. As a result, shares are already up almost 25% for the year.

Of course, the good times would end swiftly if Trump takes the White House…

The Trump Bears

As we mentioned at the top, the bulk of Kansas City Southern’s international routes are between the U.S. and Mexico.

They’re built to bring newly made goods from factories in northern Mexico to the States.

This is a classic example of post-NAFTA (North American Free Trade Agreement) trade between the two countries. Cars, electronics and other goods are produced cheaply in industrial areas of Mexico. Then they’re brought into the U.S. for sale in our lucrative consumer markets.

Trump has railed against NAFTA throughout his campaign. He’s pledged to reverse the flow of manufacturing jobs from the U.S. to northern Mexico.

If he pulls this off, it could be bad news for transporters like Kansas City Southern.

In 2012, newly manufactured cars and car parts accounted for roughly 10% of freight on the railroad’s Mexican lines. The company would have to find some new revenue streams if the U.S. stopped importing cars and other manufactured goods from south of the border.

So you can see why, in the immediate future, a Trump victory could ravage shares of Kansas City Southern. But for folks who short the stock, it could lead to a sizable payday.

We won’t have to wait long to see how this all plays out. The election is less than two months away. Immigration and border policy should remain headline issues. They’ll continue to get folks riled at rallies and debates.

But beyond those stuffy auditoriums, there will be serious consequences for markets that depend on trade between the U.S. and Mexico.

— Samuel Taube

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Source: Investment U