Trump selloff

So looks like we are for in for November surprise. Trump sell off 10% or so? Rotate to cash and reinvest later? Buy the dip? Thoughts?

I don’t think there is any real reason to liquidate your stock positions. The current spot level is not just a weighted sum of outcomes; negative outcomes will be weighted disproportionately higher due to risk aversion. So if the potential gain or loss is not material to your well being, just holding the stock might be the optimal action.

This assumes you do not have better information than what is publicly available to others. If you have colonoscopy scans of Hillary showing severe illness or something, that’s different.

I already got hedged during the Summer highs, everyone had a calendar showing election date and fomc dates.

This is why I laugh at efficient market hypothesis (one of the reasons), just because the public has the information, does not mean they make rational decisions based on it.

heartDAMAGE!!heart

Cmon, we need some serious carnage; Trump, Yellen, Bexit, global recession, debt bubble pop. Let’s make it happen people!

^ Didn’t you say you wrote puts the other day and now you are cheering on volatility to surge?

^ Yup.

Big picture, I shorted the sh!t out of SPX over the Summer, so am putting more distance on the benchmark every day, damage is good, period. Love it, want more, ultimately looking for a 2008 type crash, that would be great.

Small picture, I wrote puts on Mexico, I’ll buy some next Friday if it crashes with a Trump win.

“I’m getting night sweats and flashbacks of Brexit,” said Brian Frank, portfolio manager at Key Biscayne, Florida-based Frank Capital Partners LLC. “I’ve got my bomb shelter ready with battle helmets and water supply.” Brexit Flashbacks Haunt Traders Bracing for Clinton-Trump Vote


I’ve got the opposite problem as this guy; blood lust, I could bite into human flesh right now. I’ve felt it growing for months as the Trump/Yellen payday approaches. I need a tranquilizer or something. devil

blood lust: uncontrollable desire to kill or maim others

bump :slight_smile:

/ES limit down crying

FCX is up nicely in premarket laugh

What selloff?

hows this impacting you PA?

^ No real impact today, as it was just down and up again overnight. I shorted the hell out of the S&P over the Summer, and closed it out in the pre-election dip…it was 4 months of selling covered puts that was the huge win (no huge win on the shorts themselves as my avg cost was 2100).

Now back to shorting, just hit ES at 2150, liking this higher avg cost, Yellen coming…

Interesting time to short given the Fed is likely going to extended lower for longer. S&P melt up. Gold melts up.

Trump means RISK (everyone admits they do not know what he will do). As a psychopath myself, who is normally good at reading other psychopaths, I have no clue what he will do. He’s opaque in his intended actions, that is troubling…and kind of impressive, I can usually get a read on anyone.

Yellen might try to hold lower for longer to stabilize…but she’s at a dead end, may get fired, and market forces will win eventually anyhow. It’s late bull, Trump spells risk, so time for volatility strategies (just more of the same for me). Short highs to get hedged, close out some of the shorts on the almost certain volatility which is coming, sell expensive puts to the naked longs when they pee their pants, maybe carefully short vol during some Trump drama (there will be lots).

…hoping NOT to see a zillion dollar fiscal stimulus, that is where this strategy would fail. America doesn’t have the money, but Trump doesn’t care about math. He bankrupts stuff and walks away.

As a sociopath, I don’t think you’re using the word “psychopath” correctly.

It will be interesting to see what happens in the mutual fund space, since adds/redeems are only at the end of the day, and then the resulting trades come in over the next few days.

But volatility is back. That’s for sure. How long will it take to rip up trade agreements? What will take their place? How quickly can corporate taxes be changed? What will the wall actually cost?

Wut?

This is only true when a fund receives huge inflows. Money is put to work in real time, to the best of the ability of the PM and traders. If a fund does receive a large sum of money, say a few hundred million, then it may sit in cash for a little while as the PMs decide where to put it. On the other hand, if your fund as a mandate to be fully invested, it can’t sit in cash and will normally be placed into an ETF that most closely tracks your benchmark.

So, no, fund managers are moving the market today based on today’s adds/redeems (and, of course, their normal trading based on whatever it is they want to buy/sell).

(EDIT: seems my original post left out the word “days” in “…over the next few ‘days’.” Sorry about that)

Right. My point is that we won’t know the effects of retail add/redeem orders in mutual funds until the end of the day at the earliest. And then over the next few days as they get implemented

Are there no moves if mutual funds have huge redeems?? Or a tactical rebalance from stocks to bonds or vice versa?? If the rebalances are uncoorelated, then they should wash out, but if they are reacting to election results with similar opinions, they will be correlated.

My main point is that whatever effects of a surprise election result have in the mutual fund space have yet to hit the market, with the possible exception of active strategy tactical adjustments made by the portfolio managers.

Well, since everything seems to have rallied after Trump won (except EM), I hereby declare victory over purealpha. Hillary win = market up. Trump win = market up. Risk weighted probabilities, learn them.