Early Retirement Extreme Forums

The moves so far suggest that the market believes the following:
1) Interest rates are going to be raised. (Why the USD is up.)
2) The GOP has received a blank check to facilitate the difference between D and R policies. (The $deltas = market(R policy-D policy) + market(T policy-D policy) ... the positive moves in infrastructure can be attributed to Trump as can the negative moves the food industry. The rest is typical R-D differences.

What is not priced in, at least not that much, are possible reneging on trade agreements. These would hurt tech and the dollar (both will go down) but shale gas would go up (because energy imports would be more expensive), so those would be the next trades if it indeed does happen. I don't know if T is seriously going to go for it, so I'm not speculating on it. Unlike interest rates, which I feel confident about, this is much more up in the air (beyond my sphere of perceived competence.)

Murmurs about stagflation are increasing ...

http://www.bloomberg.com/news/articles/ ... presidency

Graphs indicate inflation going to ~2% and growth going to ~0%. Not quite the 1970s, but maybe worth it to start thinking about positioning. Most of these articles now seem to attribute it to Trump policies, but these things were ramping up before the election already.

The classical investment conclusions of the 1970s were the PP and the Alpha Strategy.

@Jacob: FWIW, talk about stagflation is very seasonal and these murmurs are right on time.

https://www.google.com/trends/explore?g ... tagflation

Anyone see that xe.com showing Yuan inflating 9%? Other sources not showing that yet..

bryan wrote:My gamble will be to take some short term profit on this Trump president-elect market after thanksgiving and then make a few bets that he will not win the electoral college. The big unknown in this scenario is who (3rd place finisher) do the GOP faithless electors want to put to the House to be chosen over Trump? Also there would be the air of uncertainty with Trump losing and if the 3rd place man is not a clear favourite going into the House.

Another one: http://www.nytimes.com/2016/12/05/opini ... trump.html

Guess I need to make my aforementioned trades (and figure out exactly what they are other than taking profit from Nov) this week..

@Jacob: FWIW, talk about stagflation is very seasonal and these murmurs are right on time.

https://www.google.com/trends/explore?g ... tagflation

That chart is great. There's a larger peak every spring and a smaller one every fall. Since the first "related topic" is AP US History these searches may not have much to do with economics.

It appears the best way to trade is going to be front-running his tweets with options, at least for those on the inside. BA was down 1% at open due to this morning's missive.

So, a hyper fast internet connection close to the appropriate source with a program that automatically scans Trump's tweets and alerts a trader to the tweet might be the new Flash Boys?

People already do this.

http://www.reuters.com/article/net-us-u ... 2Y20130423

The bottom instantly fell out of the markets. The news agencies already provide their news in a machine-digestible format and algos trade on certain keywords. This is also why the market reaction is instantaneous for FOMC releases. The trading strategy has been predetermined based on various trigger words. Algos read twitter too.

Better to find out before he sends it. It's probably still legal to trade that way, too, unless he is an insider to the subject company.

Figures someone already does this. I'm sure that's all these people do is sit around trying to figure out how to use the algos in some new way. Trump Twitter was too obvious.

I wonder how many insiders actually "approve" his tweets? I would bet not many.

Dragline wrote:It appears the best way to trade is going to be front-running his tweets with options, at least for those on the inside. BA was down 1% at open due to this morning's missive.

hmmm https://twitter.com/AmichaiStein1/statu ... 1616918528

edit: related x-post in trade log thread:
viewtopic.php?f=3&t=1323&p=133113#p133113

bryan wrote:operation pump-dump Trump continuing.

bryan wrote:My gamble will be to take some short term profit on this Trump president-elect market after thanksgiving and then make a few bets that he will not win the electoral college. The big unknown in this scenario is who (3rd place finisher) do the GOP faithless electors want to put to the House to be chosen over Trump? Also there would be the air of uncertainty with Trump losing and if the 3rd place man is not a clear favourite going into the House.

dump stage now full swing. Looks like I was a day (weekend) late for some picks. Many potential candidates, but for today I:
sold CCJ, CNQ, XME, OIH, GM

Another Trump strategy I am considering is doing the opposite of what people think Trump means. e.g. He thinks the F-35 is too expensive so LMT dropped a bit.. but he'll probably come out in a week saying "Hey, they are way better than Boeing; giving them a HUGE contract. Made a deal for more jobs!"

https://www.youtube.com/watch?v=xeKSimdqpHo

In the Trump meeting with tech execs, it sounds like Trump is going to be very happy to listen to Thiel.

Mentions: the stock market, wants to help you folks (the biggest market cap companies in the world.. maybe better enable them to deploy there overseas cash?), will be there for you, no formal chain of command around here, make it easier to trade (this _might_ be about labour/immigration), etc. So thinking I may go long on a few tech stocks soon..

I never forget Trump's own words: "I can be different things to different people."

What do you guys think of the "January effect" (https://en.wikipedia.org/wiki/January_effect)

Is it a wise idea to buy stocks now?

maxysu wrote:What do you guys think of the "January effect" (https://en.wikipedia.org/wiki/January_effect)

Is it a wise idea to buy stocks now?

Presumably if it's real it's already factored in.

How likely is it that American investments overseas will be nationalized by Russia, China, or others in the event our relation with them sours?

Bannon is anti china, pro war. And the Russia bromance strikes me as unstable. Furthermore, mainstream EU is placing Trump on their "threat list."

https://www.washingtonpost.com/news/wor ... 93b401c21a

Probably not highly likely. For one, it's basically impossible to nationalize companies like Apple and those are the common types of companies in China. They would just make the phone, etc. somewhere else. The only industries in any real danger of nationalization are rent seeking industries (oil, coal, iron ore, etc.). Maybe a few oil interests in Russia are threatened, but much of those died years ago because of the sanctions on Russia.

What about the opposite problem, government "nationalizing" (bailing out) failing companies.. What can we trust, predict Trump to do if he is in a similar position that Bush was in in 2008?

Neil Howe/Hedgeye take on the first two weeks of Trump and the economic climate going forward ... https://youtu.be/HbWSpCS_obM

Neil didn't seem confident Trump was the Gray Champion. A shame. I'm not confident Trump will be a net positive, but would happily be wrong and for him to be the champion. Is he the guy that helps create the scenario that creates the champion? Hard to say.