ON THE MONEY
STUART THEOBALD: Smart traders can make big money with accurate — and early — political insight
Smart political insight, rather than knowledge of specific political decisions, could identify value
Political events can mean big money for hedge funds. The Brexit vote in 2016 made many millions for funds who had shorted the pound. Some of those funds had bought advance access to polling data, therefore had an information advantage over the public when it came to anticipating the result. It has long been speculated that Nigel Farage, a commodities trader before becoming a Brexit-championing politician, helped them out by appearing to concede "remain" was likely to win as polls were closing, leading to a surge in the pound. Funds who bought at that point banked a fat profit hours later when the actual results showed Brexit was winning, a fact that their polls had made clear to them. There clearly are similar opportunities for hedge funds and other investors trading the SA markets. But instead of advance poll data, the trick is to have advance insight into key political decisions. During the Zuma years speculation was rife that information about the president’s decisions was circul...
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