The TACO trade was in full effect this week. For those unfamiliar, the acronym stands for “Trump Always Chickens Out.” It suggests that the president frequently backtracks on his positions whenever the stock market reacts negatively to his rhetoric.
Essentially, the strategy for traders or those in the know is this: when he says something that causes the markets to dip, you should buy the dip. History shows that within a few days, he will likely reverse course, allowing the market to recover its losses.
Market Volatility and Political Backtracking
We saw this play out recently regarding the situation in Greenland. Initially, the president suggested the U.S. might take military action or other forceful measures to take control; however, he soon backed off, stating the U.S. would not attack and that a framework had been reached. Predictably, the Dow promptly recovered all its losses and then some.
The “Swamp” and Insider Advantage
This raises a significant question. For most average investors, doing nothing is the best option. However, there are clearly people and institutions on the inside who anticipate these reversals.
These individuals and firms (hedge funds most likely) are making a fortune by buying stocks during man-made market crashes and selling once the inevitable pivot occurs.
This appears to be a textbook example of insiders and institutional investors profiting from their political connections. It really makes you wonder: who exactly is “the swamp” these days?
PS; TACO means Trump Always Creating Opportunites
This is really a dumb article. Trump was using tools at his disposal to get what he wanted. And he did. Now the US will gain control a small portion of Greenland, expanded military presence, and some mineral rights.
Stop watching PMS NOW (Formerly MSDNC) and CNN