Predictit.com is legal for U.S. residents. There is something like a $850 maximum bet on each line item, but there are enough different ways you can bet on your favored candidate winning or losing that you can put a few thousand dollars up. Unfortunately for your strategy the prediction markets have priced in a Clinton win as well. I like your strategy by the way, even though I don't share the underlying premise!
How to play the election
- Thread starter jordanwrong
- Start date
Clinton victory is more and more priced in as the market rises. Markets dropped a good bit the day after Obama was elected both times - and both of those results were expected by the polls in similar numbers to what we have now for Clinton.
You could have some volatility tonight if Trump gets any momentum in terms of early results. Otherwise the movement today looks like "buy the rumor" to me. I'm personally hoping for some "sell the news" overnight and tomorrow. Any meaningful hiccups - like a state needed for 270 electoral votes not having a result by morning (or very close with a recount) - should send things down as well.
We might stay up a bit more if it's a clear cut Clinton win and the Senate stays GOP. The markets tend to most favor a handcuffed gov't.
You could have some volatility tonight if Trump gets any momentum in terms of early results. Otherwise the movement today looks like "buy the rumor" to me. I'm personally hoping for some "sell the news" overnight and tomorrow. Any meaningful hiccups - like a state needed for 270 electoral votes not having a result by morning (or very close with a recount) - should send things down as well.
We might stay up a bit more if it's a clear cut Clinton win and the Senate stays GOP. The markets tend to most favor a handcuffed gov't.
This is pretty good analysis. While I believe the odds clearly are in Clinton's favor, there is a non-zero chance that she isn't elected which doesn't seem to be priced in. There's also a non-zero chance of some crazy rednecks lighting their trailer parks on fire, which won't impact anything except them but will have a short-term market impact. Finally, I think your observations about markets dropping after expected results are interesting. To sum it up, it seems that there is very little upside and potential downside. One way to play it may be to take advantage of put/call parity to enter an ES position that benefits on the downside/loses on the upside but doesn't lose anything if nothing happens and we have a simple volatility collapse tomorrow.
This coming from someone described at various times by posters on ET as a "libtard", "liberal moron", and "liberal idiot", and "communist" just so you know where I'm coming from.
A good election play within a diversified tactical strategy suite has been to buy an equal weighted blend of small cap value, emerging small cap, and large value stock universes on Nov 1 and sell them on May 1 and buy either: 1) utilities sector, 2) bonds * or 3) allocate to cash. Buy blend again on Nov 1. Do this for 15 + years.
Shown are the 15 year total returns after each "election"; column E. http://tinyurl.com/nvwta9l
Raw returns data: http://tinyurl.com/jgocjb6
This illustrates a lesson on: 1) the power of long term discipline and asset compounding
2) the advantage derived from investment in stock universes that exploit the academic evidence based Capital Asset Pricing Model ( small, value factors produce excess returns vs. others over long time periods ) and,
3) the futility of trading around "events" such as elections ( the strategy produces optimal risk adjusted results no matter what the outcome of the past 14 elections, geopolitical events, earnings announcements, financial media opinion, etc.
A simple predefined, 2 transaction per annum strategy producing high teen digit compound annual growth rates over a long sample with a high t-stat vs. buy & hold.
* Using time series calculation (risk profile variable) calculated between mid Nov and Jan instructs risk allocation for rest of year. High risk = allocate to Bonds or cash. Bond signaling triggered via bond price ( VUSTX ) > it's 10 period moving average, monthly period, closing price.
Primer on CAPM:
- Don't quit your day job
- Don't use leverage
- Open a Roth IRA
- Sometimes money is made by sitting in cash
- Don't be a hostage to the markets
- let the markets, profitability of world economies work for you
Shown are the 15 year total returns after each "election"; column E. http://tinyurl.com/nvwta9l
Raw returns data: http://tinyurl.com/jgocjb6
This illustrates a lesson on: 1) the power of long term discipline and asset compounding
2) the advantage derived from investment in stock universes that exploit the academic evidence based Capital Asset Pricing Model ( small, value factors produce excess returns vs. others over long time periods ) and,
3) the futility of trading around "events" such as elections ( the strategy produces optimal risk adjusted results no matter what the outcome of the past 14 elections, geopolitical events, earnings announcements, financial media opinion, etc.
A simple predefined, 2 transaction per annum strategy producing high teen digit compound annual growth rates over a long sample with a high t-stat vs. buy & hold.
* Using time series calculation (risk profile variable) calculated between mid Nov and Jan instructs risk allocation for rest of year. High risk = allocate to Bonds or cash. Bond signaling triggered via bond price ( VUSTX ) > it's 10 period moving average, monthly period, closing price.
Primer on CAPM:
- Don't quit your day job
- Don't use leverage
- Open a Roth IRA
- Sometimes money is made by sitting in cash
- Don't be a hostage to the markets
- let the markets, profitability of world economies work for you
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my first thought as well. but then, whatever, who cares.
How to play the election?
Conviction. Conviction in ones own beliefs of what the future holds. You can't post on an internet forum and expect it to come to fruition instantly or expect immediate validation of your opinion by the likes of the mainstream financial media. That is the worst thing you can expect.
Many posters here on ET are of the belief that forward thinking thought is inconsequential. Perhaps that is so if you are playing for a few pips on this or that.... but history shows that those who can foresee that which is coming down for the long term will win substantially. Just because you have a belief and don't have it verified by the likes of CNBC immediately does not mean that you are wrong.
Everyone on Wall Street is trying to divine what Trump will do. Let em. I can give ya one solid answer to the original question here, albeit there are many more. Buy the folks that sell "picks and shovels" to the energy industry. Valves, pipes, digital controls of such. and the software companies that make their niche in this arena.
If you can bet on one thing from a Trump Presidency, domestic energy production is going to explode. F*ck the Middle East. Its about jobs, and its about keeping our dollars on our shores. It'll be easy. And its gonna happen. CNBC will be talking about it after its old news for those with $'s.
jmho
Conviction. Conviction in ones own beliefs of what the future holds. You can't post on an internet forum and expect it to come to fruition instantly or expect immediate validation of your opinion by the likes of the mainstream financial media. That is the worst thing you can expect.
Many posters here on ET are of the belief that forward thinking thought is inconsequential. Perhaps that is so if you are playing for a few pips on this or that.... but history shows that those who can foresee that which is coming down for the long term will win substantially. Just because you have a belief and don't have it verified by the likes of CNBC immediately does not mean that you are wrong.
Everyone on Wall Street is trying to divine what Trump will do. Let em. I can give ya one solid answer to the original question here, albeit there are many more. Buy the folks that sell "picks and shovels" to the energy industry. Valves, pipes, digital controls of such. and the software companies that make their niche in this arena.
If you can bet on one thing from a Trump Presidency, domestic energy production is going to explode. F*ck the Middle East. Its about jobs, and its about keeping our dollars on our shores. It'll be easy. And its gonna happen. CNBC will be talking about it after its old news for those with $'s.
jmho