In today’s Money Morning…the only parallel we should draw with Brexit…if you think Clinton is going to win then you should make sure you’re prepared for a Hillarally…and more…
Get ready for potential ‘Brexit style’ surprises.
That’s the overwhelming attitude of those who are expecting Donald Trump to get close to winning the US Presidential election today. I’ve been watching a combination of Bloomberg, CNN, NBC and BBC coverage all day long. While all indications are Hillary Clinton is going to win today, no one is 100% sure.
Of course no one is 100% sure. You can’t be in an election. No matter how many polls or surveys you do, you only ever know the outcome when the votes are counted.
And it’s that fleck of uncertainty that has the world shaking at the knees. It’s that ‘Brexit style’ surprise that has everyone fearful of a Trump victory.
I was watching Bloomberg and Jim Rickards was on, talking about the ‘Trump Trade’. Considering just over a week ago we were both at Port Phillip Publishing’s ‘The Great Repression’ conference, it was good to see Jim talking about things live again on Bloomberg.
And I can see where Jim’s coming from. His position is that he thinks the markets have already priced in a Clinton victory. On Bloomberg he said if she wins nothing happens, ‘[the market is] all in for Hillary’.
However, if Trump wins, the shock of it will see major moves in the market, particularly the price of gold. As Jim put it, ‘I would rather own the shock.’
The beauty of what we do here at Port Phillip Publishing is that we have no ‘house view’. There’s no great overlord that controls the message we put out each day. We are free to express our views and ideas in a manner, which we believe to ring true.
And that means we present you often with conflicting views. Where one of us will think ‘X’ will happen, another will think ‘Y’ and another ‘Z’. We then leave the choice of who to follow up to you. We try to make you think independently and ‘weaponise’ the most important asset you have – your brain.
And if you think that today Donald Trump is going to win the US election then you’d want to make sure you had a position in the ‘Trump Trade’. You can find out more about how Jim and his team are making that trade in his newsletter, Strategic Intelligence, by clicking here.
But what if you think Hillary will win? What should you be doing then?
I think Hillary is going to win. While I did get caught up in the shenanigans of Trump, my position all along has been that I think Clinton will win.
In fact, I think it will be a decisive win for Clinton. She’s been leading almost every poll since both accepted the nominations to run. She’s got the advantage of longstanding Democrat states like California and New York.
It’s not often I concur with the mainstream. But I just can’t see how Trump is going to get the 270 electoral votes he needs to win presidency.
There are of course swing states. And there is the lingering reminder from ‘Brexit’ that sometimes surprises occur.
The only similarity to Brexit is voter turnout
But the only surprise this election is going to be the massive surge in Latino voting for Clinton. I guess Mr Trump forgot that there are around 55.6 million Hispanic people in the US. That’s over 17% of the population.
For all the Trump talk of immigrants and big walls, he also probably forgot about the 37 million legal immigrants that reside in the US. Polarising he may be, but offensive he certainly is — and I think he’s offended enough people who will decide to turn up and vote.
Florida is one of the most important states for Trump to win to even have a chance of Presidency. There has been a 100% increase in early votes from Latinos, compared to the 2012 elections. Add in absentee votes and that number rises to almost one million.
And that’s the similarities we should be drawing with Brexit — not the result, but the method of result.
The reason the ‘leave’ vote won in Brexit was because of unexpected voter turnout in the midlands and the north. That’s where the shock and surprise was. Of course, because of this unexpected voter turnout the UK is now trying to shake free of the European Union.
In the US presidential election there is unexpected voter turnout too. But it’s the Latino vote — most of whom are voting for Clinton, for obvious reasons — that’s the surprise here. The shock won’t be a Trump victory. The shock will be the powerful vote of the US Latino community.
And that’s why I think Clinton has this in the bag. As I say, it’s never over until they count all the votes. But in this race the finishing post is too close, and Clinton’s a couple of lengths ahead — enough to get her over the line without fuss.
Make your move before the Hillarally
What will a Clinton win mean for the markets? Well I think there’s a huge stock market rally in store. I call it the ‘Hillarally’. See what I did there?
(By the way, I actually coined the term ‘Hillarally’ on Sunday — if you see it from here on in, remember that.)
We got a glimpse of it on Monday when the FBI dropped its investigation of Clinton. The ASX surged on the news. Imagine what it’s going to do when Clinton wins. I think it will surge, and surge again, and then surge past there. In fact, I think a Hillarally could turn the next two months into the biggest market opportunity we’ve seen all year.
The position I think you should be taking now is in anticipation of a Clinton win — a Hillarally. And that position is in stocks. If you agree and you think it’s a foregone conclusion for a Clinton win, then ask yourself what have you done to profit from it? If the answer is ‘nothing’ then I’d be getting involved and invested ASAP.