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The Paradox of the Intelligent Electorate




Dear Speculators,

My rational nature constantly forces me to believe that other humans are alike and will deliberately take rational decisions at every opportune moment. However, the irrationality of some may bias the opinions of others which eventually lead to a rather nonsensical conclusion to a simple and clear event. We have learnt once again that the ideology which resonates best among the populist do not depend on the soundness of the message but how it aligns to their innate desires.

Maybe I'm a sucker for the status quo or I'm more inclined to prefer certainty to uncertainty but we will have to wait and see the ensuing consequences to this shocking decision. I congratulate Donald Trump and his "deplorables". I hope for their sake they do not regret this decision in similar fashion as most Nigerians do with Buhari. Americans are smart?? We might have overstated their intelligence.

The broad sentiments in the global markets may be negative as investors reprice their assets based on the implementation of Trump's proposed policies. Not all policies will be passed but it is almost impossible to know exactly which policy will be passed and its possible effect on the American and global economy. If the Fed chooses to still raise rates in December, the probability of a downward market turn between November and February will be greatly heightened.

I choose not to fear for the worst but hope for the best. The market may respond negatively in the short run but the market tends to rally in the long term. The Fed may have to focus monetary policy on calming fears rather than stimulating growth in the next few years. However it comes, USA should weather the storm.

Emeka Ucheaga,
Managing Partner,
Emeka Ucheaga Advisory

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