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American or not, how would you hedge a Trump win on Nov. 8


hillfronter83
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Unless the Left unleashes mass demonstrations and riots in the streets, I think it is a positive for the markets.

 

There might be an initial down draft like with Brexit but, people will soon realize that tax cuts, cash repatriation, infrastructure spending will bring about a very big boost to the economy.

 

Regarding tarifs, this won't happen right away if it ever happens. It takes a fair bit of time to renegotiate such complex contracts such as trade agreements. Trump is talking tough but, it may simply allow for more deals with better enforcement.

 

So unless you are a trader, I would not change what you are doing currently. And the inauguration is only in January.

 

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Unless the Left unleashes mass demonstrations and riots in the streets, I think it is a positive for the markets.

 

There might be an initial down draft like with Brexit but, people will soon realize that tax cuts, cash repatriation, infrastructure spending will bring about a very big boost to the economy.

 

Regarding tarifs, this won't happen right away if it ever happens. It takes a fair bit of time to renegotiate such complex contracts such as trade agreements. Trump is talking tough but, it may simply allow for more deals with better enforcement.

 

So unless you are a trader, I would not change what you are doing currently. And the inauguration is only in January.

 

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I wouldn't be surprised if there was a pull back right after the election if Trump wins.  People are afraid of Trump and widespread fear is never good for the markets.  They should be afraid of Hillary as well, but they aren't, so I'd expect a post election rally if she wins.  Both reactions will be short term only.  Long term I don't think Trump is any worse economically than Hillary (and vise versa) they are both equally bad.  Hillary is more war hawkish which has the potential to be really bad, but who knows.  The market is at at high point as it is, I'm waiting for the "Trump lost" rally then I'm converting more into cash.  I'm already at 20% cash. If Trump pulls out a win, the markets will either come back after a short dip or maybe this will be the catalyst for a widespread pull back.  I don't know.

 

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Like what others have mentioned, I think there will be a short term immediate drop in the market if Trump wins.  Although with valuations where they are, it could be the start of a correction.

 

My portfolio allocation between cash and stocks hasn't changed much, but I have been writing some covered calls.

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This question has been asked before. From my view I don't think that there's any way to hedge about this because there's no way to know what Trump is going to do. He actually doesn't really have a platform. Also he talks a lot of crap so when he says stuff you don't actually know what he means and what he doesn't.

 

In addition the more time goes on, I realize that even if he wants to do something he has no idea how to get it done or how to get it though Washington. From that perspective I guess you can think if elected as some kind of useful idiot for the Republican party. From that perspective I guess you could expect a republican agenda to come through.

 

One semi-concrete thing he has is his tax plan. Those tax cuts are also something that the Republican Congress would be able to get behind, so you have to assume that they will come to life. Now those would blow up the deficit. So from that perspective you could say that a good way to hedge would be to short USD. But even that's a long stretch because when things go to shit the USD has a habit of going up. So we get back to who really has a clue?

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This question has been asked before. From my view I don't think that there's any way to hedge about this because there's no way to know what Trump is going to do. He actually doesn't really have a platform. Also he talks a lot of crap so when he says stuff you don't actually know what he means and what he doesn't.

 

In addition the more time goes on, I realize that even if he wants to do something he has no idea how to get it done or how to get it though Washington. From that perspective I guess you can think if elected as some kind of useful idiot for the Republican party. From that perspective I guess you could expect a republican agenda to come through.

 

One semi-concrete thing he has is his tax plan. Those tax cuts are also something that the Republican Congress would be able to get behind, so you have to assume that they will come to life. Now those would blow up the deficit. So from that perspective you could say that a good way to hedge would be to short USD. But even that's a long stretch because when things go to shit the USD has a habit of going up. So we get back to who really has a clue?

 

Well said.  Trump will end up being a pawn for the most skilled politicos, who get elected, or who are already in congress.  He is weak and naive, and a sitting duck for professional politicians. 

 

My personal feeling is that once this circus is in the rearview we will move on to worrying about the Chinese slowdown, corporate profits taking a beating, the partial disintegration of the Eu, and other nasties that have been overshadowed by who grabbed whose p**.  Either outcome leads to a significant correction once the dust has settled. 

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I'd go long Eastern European hookers...

 

How are you going to do that? I guess the first-level-thinking approach is kind of illegal, on the second level you could maybe go long plastic surgery, cosmetics, hideous fashion..  :P

 

Oops (meant to say "I'd go long dong some Eastern European hookers") thought I was on a different forum...

 

Thank you Whiterose & I agree & am screening now for plastic surgical groups & will be attending fashion shows to identify the worst designers (hope, hope, hope there's some hookers on the runway!!!)

 

I must say though; ccplz going long coal would be quite courageous (cavemen everywhere would applaud that move!)

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Not that I would buy it, but it seems the biotech ETFs and some specific names tend to rally when ever Trump gains some momentum.

 

Still wouldn't make me vote for him...

 

Which is grand and all, however I'm not sure what that has to do with the post you referenced or the title of the thread. The thread topic is "How would you hedge a Trump win on Nov 8". To which, perhaps going long the one sector that has been slammed at every turn by Clinton and the Dems would make sense given the high correlation between the two.

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Most poll seems to predict an easy Clinton win on Nov. 8. However, they did same thing with Brexit. Since this is an investment forum, I want to see how members are hedging a Trump win other than buy some broad market put?

 

Lol, a silly question deserves a silly answer.  It's not a question of hedging, but rather of whether your portfolio's success should hinge on the outcome of an election (or any other "dramatic" event).

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Not that I would buy it, but it seems the biotech ETFs and some specific names tend to rally when ever Trump gains some momentum.

 

Still wouldn't make me vote for him...

 

Which is grand and all, however I'm not sure what that has to do with the post you referenced or the title of the thread. The thread topic is "How would you hedge a Trump win on Nov 8". To which, perhaps going long the one sector that has been slammed at every turn by Clinton and the Dems would make sense given the high correlation between the two.

 

And my answer relates to the fact that I own NVO, BBH & XBI (pay attention & don't be so snippy...)

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Most poll seems to predict an easy Clinton win on Nov. 8. However, they did same thing with Brexit. Since this is an investment forum, I want to see how members are hedging a Trump win other than buy some broad market put?

 

Lol, a silly question deserves a silly answer.  It's not a question of hedging, but rather of whether your portfolio's success should hinge on the outcome of an election (or any other "dramatic" event).

 

++

 

However it turns out I'll be fine in the long run...

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Go long companies with high tax rates and primarily US-based revenues. 20% cut to corp tax rates would primarily benefit these companies.

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Go long companies with high tax rates and primarily US-based revenues. 20% cut to corp tax rates would primarily benefit these companies.

 

Thank you Schwab, I couldn't believe I had to read so many posts to see the most relevant thing pointed out.

 

The EPS of the highest tax paying companies utilizing the least loopholes currently will benefit the most.

 

This would be the largest fundamental change.

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I would buy Fannie/Freddie preferreds/commons as a Trump hedge.

 

 

One of his main economic advisors is John Paulson, whose fund owns a significant amount of GSE stock:

 

http://www.cnbc.com/2016/08/05/trump-unveils-economic-policy-team-includes-john-paulson.html

 

http://www.wsj.com/articles/bets-on-fannie-and-freddie-get-help-from-lobbyists-1463087581

 

 

One might guess that Trump may be influenced by Paulson and others to settle the lawsuits and/or recapitalize Fannie/Freddie.

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A loss in confidence in government and political gridlock will be good for Bitcoin. Prem selling his long US treasuries for cash was also good positioning.

 

They are preparing for a market crash regardless of the outcome.  They are freeing up cash to deploy elsewhere.  I am using a very simple metric:

Trump wins: instant market crash.

Clinton wins: market rally followed by market crash.  Simply because we are due for one.

 

I cant even begin to quantify how much this election has juiced the economy in the US.  Also, When this distraction is past other non US issues will start to weigh on markets.  EU, China, et al. 

 

This reminds me of the long build up to the 2008 Olympics in China, and what followed after. 

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The odds of a Trump win is very small to be non-existent. I am yet to see a poll that shows Trump winning the electoral college. I think he is going to carry Ohio and Iowa which is better than what Romney did last time around. Trump has no path without winning one or all three of these states - Florida, North Carolina and New Hampshire.

 

The real fight though is going to be for the senate control.

 

A democratic president and democratic control of senate and the republican control of the house, should be a good path forward under the circumstances.

 

https://www.bing.com/search?q=Election+2016+Predictions+By+State

 

Anyway, it should be obvious tomorrow evening  ;D

 

 

A loss in confidence in government and political gridlock will be good for Bitcoin. Prem selling his long US treasuries for cash was also good positioning.

 

They are preparing for a market crash regardless of the outcome.  They are freeing up cash to deploy elsewhere.  I am using a very simple metric:

Trump wins: instant market crash.

Clinton wins: market rally followed by market crash.  Simply because we are due for one.

 

I cant even begin to quantify how much this election has juiced the economy in the US.  Also, When this distraction is past other non US issues will start to weigh on markets.  EU, China, et al. 

 

This reminds me of the long build up to the 2008 Olympics in China, and what followed after.

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