Trade the "Maybes" at your peril

I am in New York this week to see clients and prospects, which is why I haven't yet had time to say much about Mr. Trump snatching the prize or the crazy market moves that have followed. I don't see much change . The espresso in Murray Hill, served by Chinese immigrations, is exquisite as ever and New Yorkers remain notoriously impatient, and bad, drivers. I do notice a big increase in TV-ads for Range Rover and Jaguar, though, so maybe there is a concrete sign of the alleged rapprochement between the U.S. and the U.K. in the aftermath of Brexit and Mr. Trump's victory. 

I have so much that I want to say at the moment, but I haven't really found a coherent way to put it to text or podcast. It'll come, but I want it to come out right and to cover all the bases. The only way to stay sane, though, is to draw a sharp line between what you're seeing in the market, and how you're reacting to that in the short run, and what your view is on how the changing political winds will shape the economy/society. The two will inflect at some point but everything is up in the air right now, and chasing narratives could be very dangerous for your portfolio. 

  • Maybe the re-rating in bonds and financials can go much further as U.S. growth accelerates
  • Maybe Mr. Trump will push U.S. domestically focused equities sustainably higher
  • Maybe Russia and the U.S. are now best buddies
  • Maybe the EZ will break-up under a Le Pen presidency next year
  • Maybe Italy will have have a new Prime Minister soon
  • Maybe the benefit to EMs from global trade will now kick into reverse
  • Maybe the USD is on the verge of a bull market unlike any other
  • Maybe civil liberties for minorities in the U.S. will be severely dented
  • Maybe deportation of immigrants will happen in large scale across Western countries soon
  • Maybe the politicians that come after our current "populists" will be much more radical
  • Maybe NATO, UN and other multinational institutions don't matter anymore
  • Maybe EU countries will need to defend itself against Russian aggressions soon without help from the U.S. or the U.K.
  • Maybe Europe will pivot towards China and Russia in the next decade
  • Maybe the U.S. and the U.K. will sign a free trade agreement.

You get the point. Maybe we should just sit back and let the dust settle before throwing our own, or clients' money, after narratives that are still not yet fully fledged out.