Author Topic: ideas on how to profit from nafta break up  (Read 1450 times)

anisotropy

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ideas on how to profit from nafta break up
« on: October 17, 2017, 03:03:29 PM »
let's come up with some ways that we, the retail investors, could do to potentially profit from this event if it happens.

I will start, short Canadian dollars!

ChpBstrd

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Re: ideas on how to profit from nafta break up
« Reply #1 on: October 18, 2017, 03:05:24 PM »
LEAPS bear call spreads on:

Del Monte (FDP)
Ford (F)

Or, (safer idea) use the butterfly strategy to catch movement either up or down, depending on whether dear orange leader and the governing party take a symbolic victory or actually set up trade barriers.

Overall, I'm not sure this theme is worth exploiting. It's a year-old rumor at this point.

The long-term effect of trade barriers will be price increases and a reduction in demand, both due to deadweight losses. There are also other political blunders in the queue that will be inflationary - immigration reductions, about 3 wars, and tax cuts for starters. If you want to bet on inflation, you could set up a synthetic long on TIP, USO, or GLD (although GLD is not actually tied to inflation). Also, get the eff out of bonds if you, like Janet Yellen, think inflation is coming.

I'm looking at the whole zeitgeist and shifting most of my portfolio to a collared position in SPY.

nereo

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Re: ideas on how to profit from nafta break up
« Reply #2 on: October 18, 2017, 03:35:11 PM »
let's come up with some ways that we, the retail investors, could do to potentially profit from this event if it happens.

I will start, short Canadian dollars!

I'm not convinced the Canadian dollar will be the one to fall should the US fail to renegotiate NAFTA.  Canada and Mexico are already deep into talks to maintain and expand trade should the US exit, so that puts the US as the odd one out.  Much of the damage that could be done to Canada on timber and crude and jets has already been inflicted, and there's always the possibility that this stock market exuberance in teh US will stall.

Everything said above is speculative and my crystal ball is cracked, but to me the US exiting NAFTA = falling USD$.

dougules

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Re: ideas on how to profit from nafta break up
« Reply #3 on: October 18, 2017, 03:49:03 PM »
let's come up with some ways that we, the retail investors, could do to potentially profit from this event if it happens.

I will start, short Canadian dollars!

I'm not convinced the Canadian dollar will be the one to fall should the US fail to renegotiate NAFTA.  Canada and Mexico are already deep into talks to maintain and expand trade should the US exit, so that puts the US as the odd one out.  Much of the damage that could be done to Canada on timber and crude and jets has already been inflicted, and there's always the possibility that this stock market exuberance in teh US will stall.

Everything said above is speculative and my crystal ball is cracked, but to me the US exiting NAFTA = falling USD$.

I'm pretty sure it will/would hurt all three.  Maybe stocks denominated in Yen? 

I'm pretty sure everybody else in the market is thinking the same thing, though.  Market efficiency and all.

solon

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Re: ideas on how to profit from nafta break up
« Reply #4 on: October 18, 2017, 03:59:26 PM »
Invest in low-cost, market-based index funds. Hold forever.

kayvent

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Re: ideas on how to profit from nafta break up
« Reply #5 on: October 18, 2017, 05:26:59 PM »
Invest in low-cost, market-based index funds. Hold forever.

Live off the dividends?

JAYSLOL

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Re: ideas on how to profit from nafta break up
« Reply #6 on: October 18, 2017, 07:01:55 PM »
let's come up with some ways that we, the retail investors, could do to potentially profit from this event if it happens.

I will start, short Canadian dollars!

Good luck with that.  I'd wager the ups and downs of the Canadian dollar have more to do with the price of oil than the price of timber or anything else getting rid of nafta would change.  And more to the point, the ups and downs of the Canadian dollar have more to do with the strength of the US Dollar than the price of any goods.