President Trump


Well America, you actually fucking did it. You actually, seriously, legitimately elected Donald J Trump to the office of President Of The United States. Fuck.

It is safe to say that the majority of traditional pundits never saw this coming, but here at Blue Lake Invest we always entertained the possibility of a Trump presidency. Now is obviously not the time to gloat; it gives me no pleasure whatsoever to type these lines because I think that the immediate outcomes will almost unilaterally be awful for the ASX, the global stock-market and potentially even western civilisation itself. We just wanted to cover our portfolios in case everything went to shit and markets got annihilated by a freak* victory.

This election result is unprecedented in many ways, and as we saw with Brexit the ASX gets absolutely destroyed when historically significant events blindside us by occurring in a way that was exactly contrary to the aggregate of ‘expert’ opinion. Below is the daily ASX 200 chart. I don’t see things getting better tomorrow, noting the decline started at around 1PM AEDT as The Donald became increasingly likely to take the electoral college. 2% is a catastrophic day, even more so with the index at below 5200.

asx_donald

So, some thoughts on what went down today and what it all means:

  • No-one knows what happens from here. Perhaps Trump does a reasonable job with time and everything continues as normal after a period of recovery and stabilisation. Or, he could start a nuclear war with Russia. Anyone who thinks they know what will actually happen is a giant fucking liar. We are in uncharted waters. NOTE: We obviously think the likelihood of Trump doing a good job (i.e. not destroying the USA/world) is much, much lower than the alternative. 
  • Stock markets everywhere will feel the pain until order is established and Trump starts to give out some kind of signal that he’ll somehow avoid maiming the US economy. Your specs will feel the pain, and so will your blue chips. Everyone is heading to cash, bonds (albeit probably not US government bonds) and lumps of gold to bury in their backyard. Congrats if you actually bought gold to hedge yourself. You had a ripper day.
  • If you want to keep track of the situation head to fivethirtyeight.com and read what Nate Silver has to say. He rated The Donald a solid 30% chance to win the presidency before today because he actually understands statistics and polling uncertainty (unlike the news media). *Nate Silver’s model consistently rated Trump at around odds of 1/3 so if you had have been following it today’s result is more disappointing than it is shocking. Needless to say, Blue Lake Invest takes their polling data from Nate.

BONUS POINT! 370 economist (including 8 Nobel prize winners) have written a letter advising that his policy positions are incredibly likely to cause widespread chaos and a new GFC! Just in case you were starting to come to terms with it all.

Let’s all cross our fingers and hope for the best. People will be writing about this election for a very long time.

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