The immediate response from so many punters waking up on Thursday morning was “damn I missed out on the biggest trading opportunity since Covid”.
The second reaction was resentment that other investors who didn’t miss out were on the inside, like billionaire hedge fund manager and Trump supporter Bill Ackman.
Ackman pleaded for a 90 day pause, which he posted on X, two days before Trump announced his backflip that sent sharemarkets soaring overnight.
Moments after Trump made his U-turn on non China countries, Ackman lavished praise. “This was brilliantly executed by @realDonaldTrump. Textbook, Art of the Deal … Thank you on behalf of all Americans,” he wrote.
This was brilliantly executed by @realDonaldTrump. Textbook, Art of the Deal.
— Bill Ackman (@BillAckman) April 9, 2025
There was suspicion that investors like Ackman were trading on information of what the Republican president was going to do.
Ackman released a lengthy statement denying any advantage, and noted, “We will be buyers of great businesses at highly discounted prices which will benefit us and our investors over the long term.”
There is a great deal of suspicion in America about the nexus between politicians, their power and information and their friends in investment management.
The retail trading platform WallStreetBets even created an Exchange Traded Fund called “Insider Portfolio” that invests in the stocks former Democrat House of Representatives speaker Nancy Pelosi bought and disclosed in her pecuniary interest disclosures.
Pelosi made punts on stocks that went up before advantageous legislation for some of the companies was approved. Fellow Democrat Senator Elizabeth Warren wants to stop all of congress from investing in stocks.
But Pelosi always says politicians should be able to own stocks because the US is a “free-market economy.” And that’s the point here with Trump.
Investors who made money betting that Trump would back-pedal and announce a 90-day pause were taking a calculated risk. Even if they were told ahead of time that’s what he was going to do, if he hadn’t done it, those investors would be in a world of pain.
They may still be if he doesn’t follow through with deals with countries soon, or if the market thinks the trade war with China is more consequential than a 90-day pause with the rest of the world and continues to sell off.
The global wealth chief investment officer at investment bank UBS, Mark Haefele, sent a note to clients three days ago asking the question, “Should I sell equities now?”
His answer then was, “The short answer is no.”
“Even though the market may move even lower in the near term, periods of market stress have historically and consistently offered long-term rewards for diversified investors who look through near- term volatility, stay the course, and/or put fresh money to work.”
Haefele pointed to no less than 12 occasions since 1945 when the S&P 500 fell by 20 per cent from its peak, and yet the index delivered positive returns 67 per cent of the time over the subsequent year.
This is no investment advice, but fund managers I know in America say Trump is all about the art of the deal and that there will be deals with other countries.
It’s up to you whether you believe Trump is about to act out an amazing strategy or whether he is at sea and about to cause a global recession and another market crash.
It’s up to you whether you wake up resentful.
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