November 15, 2016

 

Dear Partners,

 

It may seem odd to receive a performance update mid month, but in light of the anxiety and uncertainty that lead up to and through the election, I thought it important to let everyone that we came through that period quite well.  Plantingfield Partners has gained 5.2% thus far in November, and is up over 16% year-to-date.

 

Going into the election, we saw a period of steady decline, which was remarkable more for its duration than its magnitude.  Indeed, nine of the ten days prior to the election were down, the longest losing streak since the 1950’s, and one day away from an all-time record.  Some saw this as preparation for an unfavorable outcome, though we saw it more as the realization of preparation that had already taken place over the summer months and into the fall.  I discussed this “stealth bear” more in my Election Day letter, in which a small number of mega-cap stocks’ positive performance camouflaged a broad market sell-off, and what it meant for markets.  I invite you to read that letter, and subscribe so that you can see all of our commentary. 

http://www.plantingfield.com/blog/2016/11/7/election-2016-fear-and-hedging-in-the-stock-market

The US equity markets, though initially rattled, proved quite resilient after the results came in, with modest gains for large cap stocks, and massive gains for small caps. Though it would be hard to argue that this outcome was expected, it seems that investors were at least prepared, shrugging off the initial reaction in the futures market (on Election Night the S&P futures plummeted, locking limit down once a Trump victory appeared imminent), opening the next day only modestly lower, and closing the day up a percentage point. Since then, the stocks that had sold off were bought back up (especially the small caps), and indexes have returned to near all time highs.

Whether or not this favorable response holds, we do not know.  But what we do know is that our strategy is designed to be profitable regardless, and we feel very good about how it performed in the face of all of this uncertainty.

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