Good afternoon!

The US Presidential Election is now imminent - it's tomorrow, 8 Nov 2016. Who knows what the outcome will be? Mrs Clinton seems to have had a late boost from the FBI saying that it has found no evidence of criminal wrongdoing in her use of a private email server.

What worries me is that the public in America seem to be so thoroughly cheesed off with conventional politics, that we could see an upset. That's exactly what happened with Brexit here, with the polls being very wrong [EDIT: See comments section below, where it seems the Brexit polls were closer than I recalled!].

For that reason I'm keeping my hedges on (a put option on the S&P 500) just in case. It will probably expire worthless, but it does at least insure me against a plunge in the markets from a surprise outcome in the election.

Also, we're increasingly in a world of post-facts politics. I.e. the facts no longer seem to matter to voters. People seem to vote on a purely emotional level, and ignore facts which don't fit their preconceptions. Maybe this has always been the case? However I think the internet & social media are changing things for the worse - just reinforcing existing prejudices in people, and ignoring inconvenient truths. I fear for the future of democracy - with candidates that would have been laughed out of the room in the past, now being taken seriously.


The trouble with small caps, is that it's difficult & expensive to move in and out over short term worries. Hence why, occasionally, I think a bit of hedging can be useful. Although, not being an expert on that type of thing, I can end up hedging using the wrong instrument. E.g. with Brexit, I initially shorted the FTSE 100, only to subsequently realise that was a mistake. FTSE 100 stocks have earnings mostly in dollars, so those shares actually went up, after the initial plunge. The better hedging trade then would have been to short sterling.

I think there's been a bit of a buyers' strike in the UK market in recent days - as I mentioned last week, lots of shares have been selling off for no particular reason of late. I think it's partly because buyers are holding off because of the US election. Another reason is that the post-Brexit rally has just gone on too long, and…

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