How to make millions on Trump win (1 Viewer)

st dude

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This is not a political thread, its an economics thread about how elections can impact wall street.

Recent polls have Trump and Clinton in a dead heat. The revived email investigation could not have come at a worse time for Clinton. Now I do think that could be a popular vote poll, from all I have read Trump's path to an electoral vote win will require him to win all the toss up states and a couple states that Clinton is thought to lead in.

Nevertheless, you can bet the new polls have the interest of those who make money gambling on the stock market. Its just like Vegas, if you bet against the favorite and win, you can be richly rewarded.

So what do you do with your money if you really think Trump will win? I say you mortgage the house, rob the kids college funds, borrow against your ira plans and short the hell out of the market. If you are right about Trump winning you could get 25% return on your money the first day.

A Trump's win will have the same impact as the brexit win did on the market, but on steroids. The threat of Trump's trade policies will send Europe into a recession and stocks tumbling. Who knows how much, it could be several thousand points. A short bettor will clean up. The market doesn't like change, at all. Wall Street is counting on a Clinton win.

This is not to say a Trump win is bad for the economy. it might be, it might not be. After the big drop there would be a big rally, at some point. The market will ultimately be driven by profits, some companies will get hurt if Trump blows up trade deals, others may benefit.

And nothing in the market is ever certain, there is no guarantee a Trump win causes a crash.

But for those who truly believe Trump will win, I think there is a ton of money to be made shorting the market. The money people in Europe are terrified of a Trump win. It will be a brexit dip times three if he wins.
 

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Just LOL at people who think Trump will win. Embarrassing.

I won over $100 on the election in 2008 and then again in 2012 by betting with people that the Democrat would win. Really is no easier way to make money in South Louisiana.
 
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Just LOL at people who think Trump will win. Embarrassing.

I won over $100 on the election in 2008 and then again in 2016 by betting with people that the Democrat would win. Really is no easier way to make money in South Louisiana.
Well I am certainly not predicting a Trump win. Wall Street is just like Vegas, you get rewarded more for longshot bets that win. If Wall Street did not see Trump as a long shot, the sell off would be already built in to the market.

People were LOLing at those predicting a brexit win, almost no polls predicted it. That's why the mkt dropped 11 percent in Europe and 600 points here.

One is always more likely to win betting a favorite, you just win more taking the underdog.
 

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Well I am certainly not predicting a Trump win. Wall Street is just like Vegas, you get rewarded more for longshot bets that win. If Wall Street did not see Trump as a long shot, the sell off would be already built in to the market.

People were LOLing at those predicting a brexit win, almost no polls predicted it. That's why the mkt dropped 11 percent in Europe and 600 points here.

One is always more likely to win betting a favorite, you just win more taking the underdog.
Bet with people, not Vegas. Vegas is smart, people are not.
 

superchuck500

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There were well-established economic concerns about Brexit, and analysts wrote about them (including the connection to the valuation of the pound and the British GDP) and predicted spasms in the event of an exit vote. All of that proved to be right.

I haven't seen the same anticipation from the analyst community about a Trump win. First, the POTUS isn't directly tied to currency or GDP in the same sense that Brexit was. Sure, Trump has "plans" that economists believe will be harmful over time, but plans floated in candidacy don't become official US law or policy by mere election of the candidate. In that sense, it is very different than Brexit - which was a dispositive referendum on national policy.

I would be careful about using funds you don't have marked for investment to short the market in anticipation of a Trump win. Lately, I have seen analysts projecting that the election won't have much effect in the market . . . and some have even argued that a Clinton win could bring a greater negative reaction (due largely to impact on healthcare and banking sectors). And any immediate, emotional drop in the market would likely be short-lived.

It's probably reasonable that either candidate will bring a small negative reaction. They're both terrible and a result means its real that one of them will be the president. But it is my suspicion that the pros might be anticipating that kind of immediate response and use it as a chance to "buy the dip". The pros trade on market fundamentals and US fundamentals have been fairly good with an improving trend. When they can predict emotional reactions to cause brief sell-offs without fundamental negative support, they smile and let it happen - then buy quality stocks for a discount.

It's probably a better idea to figure out which specific industries might benefit or suffer from each candidate's election and be ready to short or buy those as the result dictates . . . rather than just shorting the broad indexes.
 
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I think Trump closing the gap is causing some of the sell off we are seeing today. Some investors are already pricing a potential Trump win into the market.

Now this doesn't mean he is a favorite to win by any means, but I think the sell foo does reflect uncertainty that it now appears at least possible that he could win with some polls now showing a dead heat.

Once again, I don't think one can equate a dead heat poll with the assumption this is a fifty/fifty race. The path to an electoral vote win for Trump requires everything plus to go right for him to win.
 
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There were well-established economic concerns about Brexit, and analysts wrote about them (including the connection to the valuation of the pound and the British GDP) and predicted spasms in the event of an exit vote. All of that proved to be right.

I haven't seen the same anticipation from the analyst community about a Trump win. First, the POTUS isn't directly tied to currency or GDP in the same sense that Brexit was. Sure, Trump has "plans" that economists believe will be harmful over time, but plans floated in candidacy don't become official US law or policy by mere election of the candidate. In that sense, it is very different than Brexit - which was a dispositive referendum on national policy.

I would be careful about using funds you don't have marked for investment to short the market in anticipation of a Trump win. Lately, I have seen analysts projecting that the election won't have much effect in the market . . . and some have even argued that a Clinton win could bring a greater negative reaction (due largely to impact on healthcare and banking sectors). And any immediate, emotional drop in the market would likely be short-lived.

It's probably reasonable that either candidate will bring a small negative reaction. They're both terrible and a result means its real that one of them will be the president. But it is my suspicion that the pros might be anticipating that kind of immediate response and use it as a chance to "buy the dip". The pros trade on market fundamentals and US fundamentals have been fairly good with an improving trend. When they can predict emotional reactions to cause brief sell-offs without fundamental negative support, they smile and let it happen - then buy quality stocks for a discount.

It's probably a better idea to figure out which specific industries might benefit or suffer from each candidate's election and be ready to short or buy those as the result dictates . . . rather than just shorting the broad indexes.
But what exactly happens the day after? To markets? To the economy?

The conventional wisdom is that, right off the bat, the stock market would fall precipitously. Simon Johnson, the Massachusetts Institute of Technology economist, posited that Mr. Trump’s presidency would “likely cause the stock market to crash and plunge the world into recession.” He predicted that Mr. Trump’s “anti-trade policies would cause a sharp slowdown, much like the British are experiencing” after their vote to exit the European Union.
What Happens to the Markets if Donald Trump Wins?


I am an investor myself, not a gambler, and do not advocate using funds people need to gamble on an election, so lets be clear on this. I am not telling people to bet their house and retirement on an election.

I am observing that for true gamblers, a Trump win will result in a massive market sell off. Its not just me writing this, its an MIT economist by the way.

But he could be wrong too, you never know on these things. I do not think we will ever know.
 

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I think Trump closing the gap is causing some of the sell off we are seeing today. Some investors are already pricing a potential Trump win into the market.

It's hard to know what the real influencers are. The recent market has been stabilized by rising oil prices due to the production-cut deal. As of yesterday afternoon, there is renewed skepticism whether that will happen and oil has dropped. The market has moved in-step with oil for much of 2016. There's also a Fed meeting going on and that always raises volatility . . . of course the election looms in all of this, I just think that these things are far too dynamic to conclude that the market has decided to start pricing in Trump.
 

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What Happens to the Markets if Donald Trump Wins?


I am an investor myself, not a gambler, and do not advocate using funds people need to gamble on an election, so lets be clear on this. I am not telling people to bet their house and retirement on an election.

I am observing that for true gamblers, a Trump win will result in a massive market sell off. Its not just me writing this, its an MIT economist by the way.

But he could be wrong too, you never know on these things. I do not think we will ever know.

I hear you.

There's some anticipation of a Trump sell-off. There's also this: Clinton win could be worse for Nov-Dec stock market than Trump: Economist
 
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its an MIT economist by the way.

But he could be wrong too, you never know on these things. I do not think we will ever know.
Not had a chance to read that link, but it reminded me of this recent discussion I heard on NPR.

Richard Thaler: Why Most Economists Might As Well Be Studying Unicorns : NPR

THALER: You know, probably some time in your distant past all of you have had a class in economics. And you know that standard economics assumes that people are highly rational creatures capable of complex calculations, devoid of emotion, never having any self-control problems. And they're complete jerks. So I call these fictional creatures econs (ph). That's short for Homo economicus (ph)...

(LAUGHTER)

THALER: ...The Latin term. And I believe that for the last 50 or 60 years, economists have devoted themselves to studying fictional creatures. They might as well be studying unicorns because there are no econs. Well, there are a few economists I know who are close. But basically, they don't exist. And so we have very fancy models of fictional creatures. And the people I know have trouble figuring out how to divide a check if there are more than three people...
 
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It's hard to know what the real influencers are. The recent market has been stabilized by rising oil prices due to the production-cut deal. As of yesterday afternoon, there is renewed skepticism whether that will happen and oil has dropped. The market has moved in-step with oil for much of 2016. There's also a Fed meeting going on and that always raises volatility . . . of course the election looms in all of this, I just think that these things are far too dynamic to conclude that the market has decided to start pricing in Trump.
Stocks fell sharply Tuesday as nervous investors continued to monitor the run-up to the 2016 election and wait for news from the Federal Reserve, which concludes a two-day policy meeting Wednesday.

Stocks slump as worries deepen over looming election


There are lots of reasons for this market to drop unrelated to the election, no doubt.

But just as the polls tighten, the market slips, down as much as 200 earlier today.

If I knew for sure what the mkt was going to do and what caused it to move, I could probably be an NFL owner.

Personally, I do not buy or sell on this type of news. I buy stocks when their earnings are high relative to their price. I rarely sell, mostly I have bought blue chips that pay nice dividends and raise dividends annually.

Its been kind of a tortoise approach, but the returns on stocks I bought in my 30s and held until today have been dramatic when viewed over a thirty year period of time, but kind of dull from year to year.

My post is not predictive of which candidate will be good or bad for the mkt long term. I am just going with the conventional wisdom that a Trump win would result in a massive selloff.

It might not. I was in Europe a good bit this year and can say from my amateur surveys, Europeans are terrified of what a trump presidency means for them and world security. When people freak out, they sell.
 

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Stocks fell sharply Tuesday as nervous investors continued to monitor the run-up to the 2016 election and wait for news from the Federal Reserve, which concludes a two-day policy meeting Wednesday.

Stocks slump as worries deepen over looming election


There are lots of reasons for this market to drop unrelated to the election, no doubt.

But just as the polls tighten, the market slips, down as much as 200 earlier today.

If I knew for sure what the mkt was going to do and what caused it to move, I could probably be an NFL owner.

Personally, I do not buy or sell on this type of news. I buy stocks when their earnings are high relative to their price. I rarely sell, mostly I have bought blue chips that pay nice dividends and raise dividends annually.

Its been kind of a tortoise approach, but the returns on stocks I bought in my 30s and held until today have been dramatic when viewed over a thirty year period of time, but kind of dull from year to year.

My post is not predictive of which candidate will be good or bad for the mkt long term. I am just going with the conventional wisdom that a Trump win would result in a massive selloff.

It might not. I was in Europe a good bit this year and can say from my amateur surveys, Europeans are terrified of what a trump presidency means for them and world security. When people freak out, they sell.

I'm not doubting the idea at all. I don't share the enthusiasm for how dramatic it might be - though there clearly might be a spasm sell-off. There have to be buyers to have sellers, so the I think the best question in the scenario is whether it is a buying opportunity or sign of a new normal after the sell-off.

With Brexit, there were big moves to the downside that took firms with it that didn't even have much UK exposure. (See, e.g. BEAV). Those stocks came back from the Brexit spasm very quickly.

But that's why I like the VIX for a broad-market play.
 

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There were well-established economic concerns about Brexit, and analysts wrote about them (including the connection to the valuation of the pound and the British GDP) and predicted spasms in the event of an exit vote. All of that proved to be right.

I haven't seen the same anticipation from the analyst community about a Trump win.
You haven't been reading much on this then. Nate Silver and others have talked about this for months. During the Summer when it seemed like Trump was getting momentum the market got shaky. Silver at the time wrote that he doubted it would happen, but he could foresee the market jitters actually helping Trump's fear-based message, then feeding back to more market suffering and so on, actually ensuring both a Trump win and a major disruption in the markets.

Yes, the following is from Politico, but it quotes and collates the opinions of a number of economists. This isn't suggesting there's some kind of strong consensus here, but this conversation has been going on for some months now.

Economists: A Trump win would tank the markets - POLITICO

New research out on Friday suggests that financial markets strongly prefer a Hillary Clinton presidency and could react with panicked selling should Trump defy the polls and deliver a shocking upset on Nov. 8.

“Wall Street clearly prefers a Clinton win certainly from the prospective of equity prices,” said Dartmouth College’s Eric Zitzewitz, one of the authors of the new study along with the University of Michigan’s Justin Wolfers. “You saw Clinton win the first debate and her odds jumped and stocks moved right along with it. Should Trump somehow manage to win you could see major Brexit-style selling.”
Stock markets loathe unpredictability and surprises. At this point, a Trump win would be a huge surprise, and I think even the strongest Trump supporters would have expectations that his first year in office would be unpredictable and that he would be unlike any other in office (that's largely where he gets support). So the markets tanking would be pretty much expected. Whether they recover or stabilize as the FTSE absolutely did, or don't as the Pound has not, is anyone's guess.

I don't think a big dive necessarily means Wall Street hates a Trump presidency long term, but it does mean they didn't expect it and that they aren't sure how to predict it safely. When the market can't predict how something will play out it goes down. This happened when the market couldn't figure out how to evaluate the slow down in China.
 

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You haven't been reading much on this then. Nate Silver and others have talked about this for months. During the Summer when it seemed like Trump was getting momentum the market got shaky. Silver at the time wrote that he doubted it would happen, but he could foresee the market jitters actually helping Trump's fear-based message, then feeding back to more market suffering and so on, actually ensuring both a Trump win and a major disruption in the markets.

Yes, the following is from Politico, but it quotes and collates the opinions of a number of economists. This isn't suggesting there's some kind of strong consensus here, but this conversation has been going on for some months now.

Economists: A Trump win would tank the markets - POLITICO


Stock markets loathe unpredictability and surprises. At this point, a Trump win would be a huge surprise, and I think even the strongest Trump supporters would have expectations that his first year in office would be unpredictable and that he would be unlike any other in office (that's largely where he gets support). So the markets tanking would be pretty much expected. Whether they recover or stabilize as the FTSE absolutely did, or don't as the Pound has not, is anyone's guess.

I don't think a big dive necessarily means Wall Street hates a Trump presidency long term, but it does mean they didn't expect it and that they aren't sure how to predict it safely. When the market can't predict how something will play out it goes down. This happened when the market couldn't figure out how to evaluate the slow down in China.

Fair enough. But I think there are sectors and firms that would benefit Trump policies (presuming he actually means those things and that he can get them in place, to some degree). If there's any market spasm to sell-off, I'm looking at those as opportunities once the dust settles. This idea that his election will plunge the world into recession is ridiculous IMO - not because I have faith in Trump but because US policy doesn't work that way. (Now add GOP control of house houses and warming relations b/w Trump and the Hill and you might have something. But Paul Ryan isn't going to just buy in to Trump's protectionism).

I think the same goes for Clinton. If she wins, I guarantee you will see significant sell-offs in pharma and some bleed over into healthcare and maybe even bio-tech and banking.
 
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“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”


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