Post Election Investing
If any of you were wondering why I wrote this article here two days ago… well… it’s because this is the exact situation that I thought was going to happen.
I’m not taking about Trump or Clinton – I’m talking about the complete meltdown that people are having in regards to the election outcome.
That’s why I said, “So, no matter who wins the election – Clinton, Trump, or a space alien – keep in mind that you win by ultimately controlling yourself.”
With that in mind, let’s take a quick look at the 3 Presidential Election Bets that I talked about last Friday. I’ll give you quick comments on each here:
1. Put and call options on $SPY. Buying put and call options on the stock SPY will allow us to use leverage to our advantage. Plus we’ll be hedging our bet by getting both sides of the trade.
Comment: If you were able to place a call/put, I’d suggest taking your profits now. Option prices went sky-high the day before the election, which prevented us from making any real big bets, but even if you did get an order filled you should think about selling it now.
2. Bet on things you know will win. Using the website “Betfair” we can look at all kinds of bets that are centered around the US Presidential election.
Comment: This was for non-US subscribers (as we can’t use Betfair in the US), so for anyone who bet on a Trump win, you probably did very well. For anyone who bet on California voting democrat, or Texas voting republican, you should have done well too. Those last two bets were very safe and only offered about a ~3% yield, but annualized that’s ~800%!
3. Call options on leveraged gold stocks. This an extremely risky strategy, but can offer huge rewards. Leveraged stocks such as $NUGT and $JNUG are 3x levered ETFs that track the performance of daily movements of the ETFs holdings.
Comment: $NUGT and $JNUG were up big early this morning, so you should have taken your profits then.
A Trump victory may mean a lot of different things. For the short term, it means that many traders are going to have to sit and think a while about their strategy for the future.
The Mexican peso looks like a good buy and stocks such as $EWW (Mexico ETF) look attractive. It’s a bit too soon to know for sure, but they might be a good short term speculation.
The important thing for everyone to realize is that everything will move forward – it always does. We’ll stay patient and rational by making smart moves to ensure we keep and build our wealth.
Any thoughts about taking advantage of the volatility around Time Warner in the short term?
Been on my mind, but nothing of note worth writing about… yet. I’ll keep thinking it over. Thanks for the question!
First of all, thank you for all the great articles, i read them daily and learn a lot for you.
You’ve been talking a lot about the legalisation of marijuana in some states in the US, with California in particular.
Tuesday California voters approved Proposition. How come the MJ stocks fell down so much, Trump?
How do we use betfair if we are in the US?
You can’t. It’s only available outside the US.
Great question. Some investors took profits while others fear a Trump presidency. The long term investment for well run MJ companies still looks positive, IMO. Plus, we are only a couple days out of the election results. Some may still be waiting to understand what these new MJ laws mean.