The United States of Uhmmerica – where the pen is mightier than the sword

In what is an all-but-confirmed outcome as President Trump’s camp calls ‘foul’, main-stream media houses have called the US Election in Joe Biden’s favour – the past week has certainly captivated the hearts and minds of people across the world.

President Trump’s campaign and rallies to thousands of supporters, disrupted by his own contraction of Covid-19, were certainly not indicative of such a close-fought race. Joe Biden’s appeal to Americans (and many more across the globe) as the antithesis of the last four years of both US and geopolitics yielded a greater turnout of voters than any election in US history, and more votes for a single candidate than ever recorded! It should stir our own body politic to jump up in shock and amazement at what can be achieved when voting populations turn out in their masses to mark a ballot box and bring change to their country, their state, their cities, and even their communities.

As counting slowly, ever-so-slowly, trundled on in key swing states, markets reacted with fervor to the prospect of a Democrat occupying the White House – the impact of this on the US-China trade war, corporate tax, the global economy, the environment and emissions, the world’s collective response to the Coronavirus and a hopeful vaccine all seen as favourable by markets… particularly here in the beloved country. The Rand and JSE rallied to highs not seen since before the pandemic, RSA bond yields strengthened to multi-year records, while further afield global markets saw their best week in months!

The philosophy we employ at Octagon in managing your funds is not to bet on singular outcomes to binary events – Trump vs. Biden serving as a great example. Instead, our strategy is to position your investments for the ‘long-haul’, looking through the noise of the short-term and including multi-strategy holdings wherever we can.

So, while some investors were hoping for a strong stock market if Trump won, and are worried about the impact a Biden win will have on their investments, we are comfortable in the knowledge that we cannot call the future, and didn’t even try to this past week either!

Besides, if the Americans themselves could count 130 million votes in 6 hours for last year’s American Idols winner, yet took 5 days to count 145 million votes for their president, we are reminded about how much we don’t know about how much we don’t know!

G-d bless these United States of Uhmmerica, indeed!

Steve Crouse
Chief Investment Officer and Senior Advisor