Post Election Hangover.

November 3, 2024             Barry Steinman                 2 min read.

”Insights from a veteran options trader who began trading with pen and paper on the COMEX and NYMEX in the early 1990’s.”

With Election Day on Tuesday, investors are waiting with bated breath for the results and looking forward to clarity with respect to which candidate’s economic policies have the best chance of being implemented. 

Obviously the most significant outcome will be a sweep of the House, Senate, and the White House for either candidate. We will know the results on Tuesday evening….perhaps Tuesday 11/12 but that is another rant altogether. 

Regardless of who wins, the stock market is extremely overvalued, and we all know the driver was the AI boom and excessive government spending.  I fully expect those two areas to slow dramatically and thus 2025 to be a shi*t show in the equity space.  Below are a few insights:

1 – the rate of inflation is still above the target, but we are getting back to normal – however, regardless of the DNC spin, the cost of virtually everything is higher in “perpetuity” (a house, a hamburger, and a haircut).  This is simply unsustainable…full stop. 

2 – We have seen an inverted yield curve for some time and that typically is a light at the end of a tunnel, and the light is from a train coming right at you.  A slowing economy is coming soon.  

3 – NVDA has replaced INTC in the Dow Jones Industrial Average – boy does that feel like a top in AI valuation. 

Nothing will be spared as the equity markets head south – crypto, real estate and yes, gold too.  

On a positive note, I have finally heard something on the political stage (literally from a stage) which is no doubt the best long-term solution for the American economy and no it is not DOGE the cryptocurrency but rather DOGE, a proposed new department of our government.  

We have no shot of reducing the overall debt of the country without first cutting costs to balance the budget.  In a stage at Madison Square Garden, Elon Musk has proposed the Department of Government Efficiency to very simply CUT SPENDING by roughly 1/3.  The last president to implement any sort of cost cutting measure was Obama and I applaud him for it. 

So how do you manage your portfolio through the next say six months?  Sell first, ask questions later. r first post. Edit or delete it, then start writing!