Fund Manager Game Plan 2008 – by Anton Wahlman
The plural of anecdote is data. Following many conversations with the
nation’s savviest fund managers, I have discovered how we explain the
timing of the 2008 market decline. It is essentially a two-step
First, once Obama won the Iowa caucuses in early January, it was time
to start selling shares in anticipation of some probability of the
risk that he may win on November 4. As the year progressed, this
probability has been increasing, intensifying the market sell-off.
The idea is that if you thought it were a 100% probability that Obama
may win on November 4, you wanted to be in 100% cash (or 100% short,
or some combination thereof). Right now, the www.intrade.com odds are
close to 87%, which would indicate you may be in 87% cash, having left
13% on the table for now, in the market.
Second, assuming Obama wins on November 4, you would be in 100% cash
by November 5, at which point you have a few weeks to transfer the
money abroad before it would come under Obama’s 2009 IRS jurisdiction.
If you transfer your money abroad by December 31, you would avoid a
frontal collision with confiscatory socialism.
This is rational human behavior. The only irrational thing about this
situation is that McCain has mysteriously failed to point it out.