The Trump Bump is Fading Fast

Asad Dossani
Following Donald Trump's election victory, markets soared. Investors believed what most of us thought. That once Trump gets elected, he'll tone it down. He'll focus on a pro business agenda. He'll back away from protectionism, etc.

But if his first week in office has taught us anything, it is that Trump is no ordinary politician. He is more honest. He means what he says. The wall is going to be built. Imports will be taxed. Immigration will be curtailed. This has big implications for India. IT companies that serve US clients will suffer. As will Indians who work in US tech companies on H1B visas.

We are headed for a global slowdown. The US is the world's largest consumer. And they are about to consume a lot of less from the rest of the world.

As this sinks in, markets will turn. In a few months' time, the Trump bump will be long gone. Instead, we'll be talking about the Trump crash.

As traders, we like to keep our distance. Our goal is not to criticise any one person or policy. Our goal is to understand how the events around us impact the markets. Because markets are what we're all about.

Whether the world is falling apart or making new highs, we don't pass judgement. Politicians are going to do what they're going to do, regardless of what we do. We can only prepare. We can try to profit too.

I was in London during the financial crisis of 2008. At the time, bank shares were falling fast. Regulators stepped in to ban short sales of banks. But the banks kept on going down. The press blamed speculators, traders, and people like me.

But the way I see it, traders didn't bring down bank stocks. It was the banks themselves that got into trouble. The bank stocks were down because the banks were about to collapse. Traders had nothing to do with it.

As traders, we share one thing in common with Mr Trump. And that one thing is honesty. We must be honest in our calls. After all, there's money on the line here. The more honest we are, the more profitable we'll be.

And so, as things are about to turn, we are calling it right now. The Trump bump is fading fast. The Trump crash is on its way. Be prepared for a rollercoaster ride in the markets. And be ready when opportunity strikes. There is no better time to be a trader.

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6 Responses to "The Trump Bump is Fading Fast"
10 Feb, 2017
Globalization is a trend that cannot be stopped. It is driven by economics and that demands an integrated world. Trump is trying to set the clock back and this is bound to put a spanner in which the globalizing world world works though certain events may cast a slight doubt on this. There is definitely big trouble ahead.Like 
02 Feb, 2017
Asad's observation is in line with some of US analylists who have warned a US market sell off (possibly global). This means we should not be carried off by the pre and post budget rallies of Indian market. They could be prelude to a sell off. Like (1)
Daniel Peter
31 Jan, 2017
The writing is clear on the wall. Trump will definitely jolt if not build the country and market. Like 
31 Jan, 2017
Rightly said , Asad . Does this mean we sell IT and other scrips now when high and buy these when the real rollercoaster happens !? Like 
30 Jan, 2017
So true....the world is going to look very different under Trump. His presidency could be the black swan..Like (1)
27 Jan, 2017
true...Like (1)
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