I have said many times that I am not a macro driven investor. I have no edge over the many well connected fund managers that have Federal Reserve governors and banks of analysts and economists they can consult. Instead I focus on insider behavior trying to read the tea leaves to gain some advantage. Tuesday night proved that banks of analysts and high ranking Fed members provided no edge either as almost no one could have predicted the election outcome much less the extraordinary behavior of the stock market.
The Fund did well enough the day after the election, up about 1% considering we were only 60% invested with 40% or so in cash. I choose the words “well enough” carefully after considering at around 11:00PM last night, I was bemoaning the fact that I was so heavily invested when the election results became clear and the futures were limit down. But by this afternoon, I was bemoaning that I was only 60% invested as the market made a stunning, perhaps unprecedented reversal of nearly 1000 Dow points. Yes, this is a humbling business.
The vote to elect Trump in my mind was very similar to the “Brexit” vote, another chorus of throw the bums out. Except this time it was accompanied by a more ominous tone of “lock her up”. Democracies around the world seems to be retreating from decades of globalization. The election results are clear to me. Legions of people feel left behind and disenfranchised. So where do we go from here? If anyone tells you they know, they are most assuredly mistaken, or even worse lying to themselves. We really are in unchartered waters.