Donald Trump Is Underowned

It’s often been said that the most dangerous words in the investment business are “it’s different this time.” To be sure, few good things happen after uttering those words, but I’ve found more immediate pain meted out by the markets when I say “the market is wrong.” One would imagine such thoughts sometimes occur to the cottage industry of political punditry, but if one looks at the phenomenon that has become Donald Trump’s bid for the Presidency, it seems few see the irony. If Donald Trump were a stock (need you ask what the symbol would be?) it would be hitting new highs despite a series, maybe even as a result, of analyst downgrades and downward earnings revisions. Since Trump’s speech announcing his candidacy (perhaps one of the most interesting if not the most hilarious political speeches of all time), a series of political pundits have continued to write his political obituary, always after the latest shocking thing he has to say. Never has anyone in modern political life been so insistent on sticking his thumb into the eyes of political correctness and not been destroyed by it. As a result, nearly three months after the IPO, TRUMP is hitting new highs, large institutional investors are underweight in their positioning, and the shorts are finding it hard to borrow the stock. In essence, all the “experts” are saying the “market” is wrong, with predictable results.

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