Brexit - a 3-day wonder for markets (JMO)

As perceptive as Ant is, one might note that he is out there (west), not out there (east, aka UK).

I love it - that’s the most US centric comment I’ve read in a while - it hadn’t occurred to me that Asia is West and UK is East!

But then that’s because the British are perhaps even more longitudinally centric than the US thanks to GMT and European circumnavigational explorers’ world mapping efforts etc.

True I’m not on the ground in UK but I’m pretty tied in to it all events there though I can still apply a detached perspective being in Singapore.


All in all it might be fine for you guys in the US to dismiss but where this is taking place it is affecting a lot of people in real ways.

Thanks Ant, for a very thoughtful post, and fascinating insight from a British point of view, that the rest of us don’t get in terms of how it affects people on the ground. I guess what I was addressing was more along the lines of what Denny said:

I have no idea what the economic consequences will be but the market and my stocks think it’s a non-event.

In my Brief review two trading days ago, I wrote:

I’m up 5.6% from the Friday before Brexit…
I’m up 12.7% from the Brexit bottom, two days after Brexit. And that was only eight trading days ago. Up 12.7%!

Now, just two days later, and it’s just 10 trading days from the Monday-after-Brexit bottom, I can say:

I’m up 9.1% from the Friday before Brexit.
I’m up 16.6% from the Brexit bottom, two days after Brexit. And that was only two weeks ago. Up 16.6%!

I think this addresses three issues.

  1. As Denny said: the market and my stocks think it’s a non-event, and all the people looking at arcane charts and telling us the world was going to come to an end were wrong. Sure there may be a recession somewhere ahead (there always is), but anyone who went all into cash and gold was taken in.

  2. I said in an earlier post that the market was like a compressed spring, with compressed PE’s, as revenues and earnings for our companies had been going up for the past two years, but stock prices were going down or staying stationary. Some people mocked and said according to their charts the S&P was overvalued. I beg to suggest that my portfolio up 16.6% in two weeks looks a lot like a compressed spring expanding. It was as if the market was looking for an excuse to take off, and the uncertainty about Brexit (yes or no) being over, it took off.

But that doesn’t mean stocks have gotten overvalued now. LGIH and SKX, my largest two positions, still have PE’s of 12+ and 16+. They both had earnings up over 70% last quarter.

  1. Our little stocks, although they go down faster than the market, sure rise faster when the market is rising. And the market rises more than it falls.

Yes a recession will always come. Yes the market may be down today (even probably will after rising as it did). But enjoy the ride.

Best to you all


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As someone who is on the ground in the UK, I don’t have a sense that the sky is falling in. Things are moving quickly and I think the speed with which our new PM and cabinet have been put in place is impressive.

There is no doubt that leaving the EU will be complicated and is unlikely to be a pain-free experience in the short term, but longer term I believe that this will prove to be the right decision for the UK.

Of course those who voted to remain don’t like the referendum result and many are still focused on the perceived negatives. However, more people voted to leave the EU than have ever voted for anything in the history of the UK. This is democracy in action, something the EU is a little short on.

Also, let’s not forget that the EU is no shining star of economic success or crisis management either!

All just my opinion of course…



I didn’t realize things were moving so quickly and I think it’s a good idea. The market does not like uncertainty. Brexit is Brexit! Good show!

Denny Schlesinger

Alex, I agree. And I am encouraged by some of Mrs. May’s comments and appointments. However, the danger is that she, the Chancellor and the Foreign Secretary will try to arrange a 5-year fudge so that the UK never quite leaves, and then ends up remaining in the EU, either through a further referendum or by basing a general election on that outcome. For that to succeed, weak negotiation and a continuation of a milder version of Project Fear will be deployed. There are many people in high places willing that end.

For the future success of the country, which as I see as retaining the option to elect, at some time in the future, a government devoted to low taxes, small government and high individual freedom and responsibility, restoring the status quo ante would be a really bad outcome.

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a government devoted to low taxes, small government and high individual freedom and responsibility

Amen! I wish America would focus on this, as well.

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I know it has been discussed here and whilst I don’t disagree with the point that there will always be another recession at some point in the future, the first post Brexit data has been released and seems to indicate immediate and causal impact on economic activity.…

In short - it looks like a definitive Brexit related result. UK most affected - more than expected, Europe less affected and US hardly or not affected. UK is looking at modeling a 0.4% contraction in the quarter now.

For those of you who just care about US stocks - looks like you were right to ignore it.

For those of us who were concerned about UK economy and UK stocks - we were right to fear it.

For those who might ponder on the implications of a global impact - watch this space…