To investors,
The next President of the United States will be decided today. Tens of millions of Americans will cast their vote in hopes of seeing their candidate elected. But investors are laser-focused on how the election will impact their portfolio.
My goal with today’s letter is to answer that question.
First, Chris Hayes and Alex Harring from CNBC analyzed the S&P performance after every election since 1980. Here is what they found:
We have only seen a decline in the S&P 500 by the end of the election year 4 out of 11 times. The average return is 1.5% and the median is 3.7%. Not bad for historical analysis of the last two months in an election year, while also ignoring whether a Republican or Democrat won the election.
Next, Quinten Francois points out that “each U.S. election week has set a Bitcoin price floor that’s never been revisited.”
Zack Voell shows the percentage return 1-year after each election during bitcoin’s lifetime:
History may not repeat itself, but it sure does rhyme. Bitcoin doesn’t care who the President of the United States is. The digital currency continues to go higher over the long run.
Another data point that I found fascinating came from Bitwise’s Matt Hougan. He said “here are the total net flows since inception of the largest gold and bitcoin ETFs:
GLD: $20.9b --- launched November 2004
IBIT: $25.8b --- launched January 2024”
That is a mind-blowing comparison. Blackrock’s bitcoin ETF erased a 20 year head start for gold in less than 12 months.
Up next, let’s take a look at what investors are doing to position themselves going into the election today — Bloomberg’s Eric Balchunas highlights the fact that investors appear to have no fear:
“NO FEAR: ETF investors shunning all hedges (VIX, inverse equities, gold, cash) while pouring cash into stocks heading into Election Day. In my opinion, investors have been conditioned to tune out scary headlines and keep buying.”
If you think Trump is going to win, you have been buying US equities. If you think Harris is going to win, you have been buying US equities. If you don’t care who becomes President, you have been buying US equities.
This fact is quite the narrative violation.
Financial markets love certainty. That is what we are all going to get by the end of the week. America will know who the next President of the United States will be. Investors will continue allocating capital according to the perceived policies.
There are plenty of people ready to pitch you the latest doomsday scenario, but I just don’t see that as a plausible future outcome right now. I would never bet agains the US economy or the American people.
The bulls are in control. The bears are in disbelief. Today will be a historic day. Sit back and enjoy the show.
Hope everyone has a great Tuesday. I’ll talk to you all tomorrow.
-Anthony Pompliano
Founder & CEO, Professional Capital Management
🚨 READER NOTE: I am co-hosting a conference with Lance Lambert and ResiClub on residential real estate in NYC this Friday, November 8th. We have many industry experts speaking about the housing market, impact of interest rates, effects on the US economy, and what investors should know moving forward.
The event has been quite popular, so remaining tickets are limited. If you would like to attend, please grab your tickets: Click here
Dylan LeClair Explains Why Corporations Are Putting Bitcoin On Their Balance Sheets
Dylan LeClair is the Director of Bitcoin Strategy at Metaplanet & Market Intelligence at UTXO Management.
In this conversation, we discuss bitcoin being put on the balance sheet of publicly traded companies, why it has created the best performing stocks in the entire world, what it means for all the individual businesses, and where he sees these companies going moving forward.
Enjoy!
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