Trading a split government — From McDonald's to millions — Profiting from market chaos
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Joe Ciolli
Nov 10, 2020, 22:03 IST
Willie Mandrell
Dear Readers,
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Heading into last week's US elections, the bull case for stocks seemed to be "Blue Wave or bust." The thinking there was that a fully Democrat-run government would quickly usher in a big chunk of much-needed stimulus and send risk assets soaring.
The speed at which Wall Street talked itself into its new reality was astounding. Bolstered by their new positive rationale, stocks soared in the election's immediate aftermath.
But under the market's surface, the shift wasn't so simple. Although most investors remained directionally bullish, they rotated out of certain trades in favor of other, more appealing ones. It ultimately amounted to a reshuffling of market dynamics — the type of shifting sands that wise investors can see and capitalize on.
For more, see below Business Insider's best Investing stories of the week, which include a wide array of additional recommendations, strategies, and tips for navigating uncertainty.
To come up with cash for his first down payment, Mandrell worked a series of odd jobs, including stints at Outback Steakhouse, McDonald's, and Marriott. He now oversees 40 units in Boston.
Rob Emrich is the founder of the $411 million Acruence Capital, which offers various option overlay and volatility-hedging strategies. The firm's volatility-capture program, which helps dampen volatility in its clients' portfolios, was up more than 3,700% in March at the depths of the stock-market crash.
Emrich is now suggesting that VIX could hit 125 in the next four to six months, given an unexpected catalyst that could be related to the elections, COVID-19, or geopolitical risks. He shared how investors could take advantage of this level of volatility and mitigate risks in their portfolios.
Andrew Left of Citron Research walked Business Insider through the stocks he's buying and betting against today. One of his newest buys is a company he called an enormous fraud last spring. He now says Jumia has fixed its major issues.
Citron Capital, Left's hedge fund, says it's up 75% in 2020 after subtracting fees.
"The market loves deadlock. Everybody doesn't necessarily like massive change; certainly market participants don't because it becomes harder to forecast what that change will do to the economy and to companies."
-- Tom Mantione, a managing director for UBS private-wealth management, shedding some light on why a divided government is positive for stocks
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