Post: #1

BrExit in the UK caused the £ to fall against the $ sharply and has stayed in decline ever since... the London Stockmarket slumped, but then recovered quickly afterwards

I just used a bookmaker to bet on the Brexit result and made a bit of money - I wish I had played the financial markets instead and made some big money... possibly even being able to hedge it so I wouldn't lose much if things went the other way?


No doubt the markets are already factoring in what might happen in the US election (USD/GBP, Dow, Nasdaq, S&P trending downwards all week) but there will definitely be far more significant movement when the result is finally announced...

My guess (and please correct me if I am wrong) is:

- a Clinton win will be seen as a return to the establishment and business as usual... which will keep the markets steady and eventually cause them to rise slightly?

- a Trump win will be a shock to the system and create deep uncertainty... which will hit the Dollar and the Stockmarket hard?

Will the Dollar drop against more feminised countries like the UK, and rise against more masculine countries like Russia?

Will the price of Gold/Silver be affected much?

What is the best way to minimise risk and maximise profit from what might happen?

Post: #2

No matter who wins the markets are going down. Save money, buy gold and silver, and if you have real estate sell it or borrow against it now.

Post: #3

Markets will go down for a short amount of time and then recover.

Post: #4

delete

Post: #5

If Trump wins, the stock market falls. I'm inclined to say that the dollar would strengthen, but there are two mitigating factors here. First, if the dollar strengthens, then US manufacturers that export goods will get hurt, and that may spur a monetary policy move to protect exporters. Second, if the equity market sells off extremely sharply, the decline itself may attenuate any new strength in the dollar.

As an aside, I have said since before the vote that Brexit won't actually happen, and I stand by that.

I just sold some stock in a megacap that is involved in a large foreign transaction. My thinking is that a Trump win would cause the market to decline, but may also jeopardize large international M&A deals by US corporations.

Trump himself had stated that the market has been in a bubble, which was a pretty fair assessment IMO. He stated in the first debate that rates should be higher, which everyone except the Fed seems to believe -- and that is likely to change in December.

A december rate hike would show interesting timing by the Fed.

I suspect that Yellen intentionally delayed a rate hike to prevent a rotation out of the equity market. She was appointed by Obama, after all, and worked for Bill Clinton too. Optically, a market that trades at an inflated valuation makes Obama and team look like they're strong on the economy.

Post: #6

Let's say you had 5-10k to play with, are there any specific industries you'd invest in the day after Trump is elected (if it happens)? Mexican concrete and rebar or major North American moving companies perhaps?

Post: #7

(11-04-2016 06:40 PM)scotian Wrote:  Let's say you had 5-10k to play with, are there any specific industries you'd invest in the day after Trump is elected (if it happens)? Mexican concrete and rebar or major North American moving companies perhaps?

Ok. Assuming I have the preferences, risk tolerance, and financial profile that I currently do, and risking 5-10k isn't going to make or break anything else in my life, I would do the following (perhaps even the day before the election):

American coal is a big one. Trump has pledged to deregulate the industry, and he has used his stance on coal as a symbol of support for American miners in general.

I'd want to be long the American investment banks, too. A Trump-selected Fed Chair would be more likely to raise rates (which benefits any entity that has tons of cash or near-cash deposits). More importantly, the Republicans want to reduce regulation in the financial industry. People talk about reinstating Glass-Steagall, but I think this would probably accompany a full or partial rollback of the Volcker Rule, RENTD regulations, and all the other rules currently weighing down Wall Street.

US automakers also stand to benefit under Trump. Despite the fact that American automakers are moving some of their production to other countries, it's not as significant as it's made out to be. For example, Ford's Small Car Division is moving to Mexico, but as far as I can tell, this move only shifts 2 cars: Focus and C-Max. Any protectionism or changes to existing trade deals like NAFTA would harm foreign automakers far more than American automakers. Not to mention that Trump detests TPP and wants to increase tariffs on Japanese autos sold in the USA.

Similarly, Trump would be worse for American beef, pork, poultry, soybeans, and other farming businesses. American beef is taxed extremely heavily -- 38.5% -- by the Japanese. TPP would reduce this tariff to 9%. Clinton has turned her back on TPP after calling it the "gold standard," but I have read that some of her insiders consider this a temporary stance, suggesting that she will resume support after the after the election. To summarize, TPP is bad for American automakers and good for American farmers, and Trump is more opposed to TPP than is Clinton.

I would hedge out some of the market exposure too, because I feel like shit's about to get weird in the equity market. You can obviously do this in an unsophisticated way by selling a dollar's worth of SPY for every dollar of long stock that you buy (netted against and short positions). It's unsophisticated because the assumption here is that correlations go to 1 if the market blows up. One can also buy longer-dated SPY puts -- if using at-the-money, I'd buy one contract for every 50 SPY shares you would have shorted -- for accounts where one doesn't want to set up margin. (I don't like betting with other people's money.)

Just my personal thoughts in response to your question. I'd be interested to know yours.

Post: #8

I think there's already been a decline for 8 days straight or the like. I think the article I read said it's the longest decline since 1980.

So a lot of Trumpfear might be priced in already.

One interesting thing is the USD has been considered a safe haven, but if people are scared of a Trump Presidency, maybe they'll bank on something else.

Post: #9

The market was completely offsides on Brexit. Stock futures were actually getting bought in the days before and night of the vote before the Brexit votes started getting counted. Before election night futures will be over 100 points off their highs from October. A decent chunk of the move has already been made, but it's hard to say if it will be a 1-2 day selloff then recovery or a sustained decline. I think if you were going to position yourself for the election it had to be done a month before election day. Because now there's a high probability of getting caught in the chop of the BTFD crowd post election if you try to short the stock market then.

Post: #10

There will be hugely increased volatility no matter who wins. I will step aside, not going to trade for a few days at least.

Post: #11

How I've traded it:

I know volatility and uncertainty is going to be at a ridiculous high (Brexit the VIX was at 30). The last day you likely could've done this was yesterday:

1. Bought calls from 22-25 in the VIX for Nov15 expiry (shit didn't hit the fan until after Brexit vote). What I will do is take profits Tuesday, while leaving a few lotto tickets on for a Trump win.

2. Bought VXX calls for Nov11 at 37 strike. These have already almost doubled. Same technique, Tuesday take profits, leave a few on for Trump win.

3. Short and long the SPY via puts and calls. Either way, should make some money here.

4. Sell VIX Nov8 put spreads

5. Bought Call options in GLD

If you own equities, buy insurance or gtfo altogether.

Looking at brexit, I'd expect the USD to decline in value as well. Look into trading some currency pairs against it.

The market has not fully priced in a Trump win. I can see a shit ton of people buying insurance on a Trump win, but this 3% slide isn't the whole extent. If Trump wins, there's going to be a large correction, think up to 5%. It's not because he's going to ruin business; it's because markets don't like uncertainty. There is almost always an over emphasis on Implied Volatility, but that doesn't mean you can't capitalize from it.

Also, there is very likely going to be a December rate hike. These two events will be catastrophic for the market. I would stay out of equities until the new year. I'm almost exclusively a derivatives trader now, for the very reason my downside is defined.

Post: #12

In my non-professional view, Gold and Bitcoin should see some tasty gains in the short run. The Dollar will take a hit.

Post: #13

Invest in bricks.

Post: #14

Does anyone know what Soros is doing market-wise?

Post: #15

Since you guys are financial whiz kids let me ask you this:

Do you think the election will effect the value of units in Trump labeled buildings?

I am personally in love with the Trump International in Waikiki. Would you hurry up and make an offer on Monday? Wait until Wednesday? Please give me some advice.

Also, consider that the income on the unit I want is from a hotel pool. Let's say Trump wins, more people want to stay there? If he loses will people blow him off and room rates drop?

People will always come to Waikiki, and the building will always have a full unobstructed ocean view, but the branding is where the money is.

Aloha!

Post: #16

Short NAFTA reliant equities and the Mexican Peso.
Though it might be too late now due to the high VIX.

Post: #17

(11-05-2016 06:46 PM)Mr. Accuride Wrote:  Short NAFTA reliant equities and the Mexican Peso.
Though it might be too late now due to the high VIX.

You can add the CAD to that as well.

Post: #18

Is anyone taking any positions either way?

Post: #19

Here are some predictions for what it´s worth:

http://www.cnbc.com/2016/11/07/market-pr...treet.html

Post: #20

Good call on shorting the peso.

Global markets will take a tumble no doubt on news of a Trump victory. But ultimately he may prove a positive thing for business and companies. Buy an index on the dip? Anyone doing this?

Post: #21

I don't know much about investment/trading but I will say this: this is likely a great time to start moving some of your money as such a significant event as the election of a controversial presidential candidate is something that I imagine could really shake things up for a period of time.

Post: #22

Wow.. was expecting to see a Brexit style bloodbath across the board after the Dow futures were down 800 last night but now the market is up...

Post: #23

(11-05-2016 06:46 PM)Mr. Accuride Wrote:  Short NAFTA reliant equities and the Mexican Peso.
Though it might be too late now due to the high VIX.

Couldn't openly reveal this until today, but if you had dug into the NAFTA reliant equities, you might have found the idea to short the KSU stock.

If you did, congratulations. 10x+ return.

Post: #24

I made some money on Haliburton way back when Cheney was VP, obviously this was no coincidence. I admit I'm not as updated today though but have made St of my stuff sunk in biometry, index funds and mutual. What publicly traded companies with Trump connections are most likely to see the favor of coming government contracts?

Post: #25

I heard there is a company called NAK that has been sitting on one of the largest undeveloped gold reserves in the world (Alaska), but hasn't been able to obtain a mining permit due to an EPA run-in. Many people are saying that a Trump presidency will facilitate approval of the mining and the stock could easily become a ten-bagger. Do your own research, but could be a something to consider.