Trump's Rookie Mistake

Tyler Durden's picture

Submitted by Kevin Muir via The Macro Tourist blog,

The last couple of weeks have been wild. Egged on by Trump’s talk of “yuuugeeee” tax cuts, the stock market has propelled upwards in an unrelenting march to record highs.


Zerohedge did a great job highlighting Trump’s “talking up” of the upcoming tax cuts:

Trump did it again: one week after he promised to unveil “phenomenal” tax cuts, moments ago in his meeting with retail CEOs, who are meeting with the president to get him to kill the border adjustment tax idea, he pulled another OPEC, using the precise word the algos were looking for, and this time said that “tax reform is one of the best opportunities to really impact our economy,” Trump said. “So we’re doing a massive tax plan that’s coming along really well.”

He also said that there will be a “much, much simpler tax code” that will lower rates for everybody in every bracket. He added that “other than H & R Block, people are going to love it.”

Of course, people would love to know when it is coming, to which Trump had no explicit answer, instead saying the “tax plan will be submitted in not so distant future”

Trump’s rhetoric about “phenomenal” tax cuts is like throwing raw meat into a cage full of starving lions. Stock market investors see nothing but dollar signs and quickly put away the pink tickets for fistful of blues.

I don’t want to argue about Trump’s policies.

But I want to remind you that there is a reason the best CEOs underpromise and over deliver. The CEOs that over hype their company’s prospects face a stock price destined to disappoint. Even when they meet expectations, their stock price often falls because it is “fully baked in.”

Trump is making a rookie mistake. He is setting up the stock market to be disappointed regardless of the tax cut he manages to pass.

I don’t know when this rally will end, but I know it will come before the actual tax cut news. Trump has set expectations unrealistically high. Trump (and investors) will have to learn that it is better to dampen down expectations ahead of the actual announcement.

Be careful buying stocks up here on Trump’s tax cut news. The closer we get to an actual announcement, the more dangerous it becomes…

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
undercover brother's picture

Not fake news, just ridiculous.  

NugginFuts's picture

Whatever, Dow looks on par to end UP today despite nothing positive to report. If anything, Trump was trying to tell them tax cuts won't happen till after Obamacare reform and that fight is gonna be a bitch. Did the market mitigate expectations? Nope. They BTFD again. As always. 

BigFatUglyBubble's picture

The problem are his tweets and interviews patting himself on the back with pride for the DOW record highs.  He said on ABC he wanted it to go "up, up, up."  Scarramucci and Conway did it too.  He's giving the left a ridiculous amount of ammunition for the next election, because when the market eventually goes down, he will have directed blame at himself and painted a bright target on his back.

barndoor's picture

Yuge tax cut and yuge infrastructure stimulus.  Print money, issue more debt, or both.

froze25's picture

"You know it will end before the tax cut..." Yeah well this market has shown it can stay irrational longer than you can stay solvent so there is that as well.

NidStyles's picture

Fuck Wall Street, they only have paper and other people's guns to threaten him with.


Guess who those guns belong to....







This is the United States of AMERICA, not the United States of Bankers.

Shitonya Serfs's picture

Hussein gave everyone a heads up in March 2009 that: now is the time to get into the market again. Also, don't forget, I despise Hussein.

GUS100CORRINA's picture

I am afraid to say this, but it looks like a meal of "HUMBLE PIE" is about to be served to everyone.

President should always be positive, but the STOCK MARKET is NOT the place to do it. 

P/B value is above 3 for the entire market which means people are paying 3 times the value for what stocks are actually worth!!!!!!

I don't care how many tax cuts OR infrastructure programs are initiated, the MATH does NOT ADD UP!

Jim in MN's picture

Well, it sure beats Obama's Wookie mistake.


...thangyou, thangyouBarrymush....

lasvegaspersona's picture

Maybe he sees the coming hyperinflation.

DOW 100,000 by december.

Remember Zimbabwe!!!

deth's picture

That's a real possibility. Because (with apologies to Richard Russell) it's "Inflate, then die"

barndoor's picture

Yuge tax cut and yuge infrastructure stimulus.  Print money, issue more debt, or both.

Sanity Bear's picture

So it's a "rookie mistake" not to intentionally manipulate the stock market.

What's the game?

GunnerySgtHartman's picture

Anyone who would buy stocks at these levels has to be nuts (or an HFT, one).

wisehiney's picture

What "they" and this author will discover is the WE are not as forgiving as "they" think.

Give em hell Trump!

Bryan's picture

"The last couple of weeks have been wild. Egged on by Trump’s talk of “yuuugeeee” tax cuts, the stock market has propelled upwards in an unrelenting march to record highs."


Wait, I thought it was because of that hedge fund unwinding all it's shorts at a loss?

youngman's picture

A cat farts ..and some algo goes off...I really dont see Trump as the major push on the market....

lasvegaspersona's picture was it on ZH today...

BigFatUglyBubble's picture

Bullard and Fischer also sending out dovish signals last week or so

A. Boaty's picture

If markets tank, then, of course, someone else must take the blame.

J bones's picture

Still ramping in the final hour... what a JOKE!!

slyhill's picture

He's daring them to pull it.

BigFatUglyBubble's picture

I don't think so.  I think he really thinks he is going to grow the GDP so much that it will outgrow the bubble.  I'd like to see the numbers on that.  Sounds outrageous. 

Dr. Richard Head's picture

I've talked to quite a few gray hairs that have seen this game before, but somehow they hold onto the idea that if the eCONomy grows enough that it can overcome any federal debt worries, as the income tax coming in from the great incomes will more than compensate.  Then again, that math doesn't add up. 

BigFatUglyBubble's picture

The debt can never be paid down because there is always more cash+interest than there is cash.  It's a giant scam.  He should be using the bully pulpit to explain this to the people, but he won't.

Dr. Richard Head's picture

The entire edifice crumbles indeed based on this money pyramid scheme.  Too bad more aren't aware of this.  Those of us who are aware are powerless to do anything about it. 


DYS's picture

I think we need to see how the market responds.  

There are lots of levers in the market.   Trumps voice is just one.   

If the banksters decide to roll it along with Trump (play ball, float debt, finance the re-arming of the military, etc) they can inject capital and stabilize for a long time.   The last 8 years should have proved that manipulated economies don't die quckly.

centerline's picture

Author must be short the market big time and losing his shirt.

jimmyfromminny's picture

You guys realize Trump invested with John Paulson, the man who's lost more money in dollar terms than any other investor in history (one huge % return on small AUM, then lose 50% for mulitple years on big AUM).  He should leave the investment stuff to others.

NEOSERF's picture

Your rookie mistake is believing that any tax cut has to pass...just need to keep talking about it...

paint it red call it hell's picture

It ain't trump's mistake. The mistake was made 2008 and/or before.

When the inevitable correction hits, markets just happen to have been propped up into his term for worse or better. When triggered, the finger will certainly be pointed at him joining with every other globalist media finger already accusing him of everything from golden showers to mental deficiency to fascism.

But of course fascism had to be redefined to be made apply.

BadDog's picture

Venezuelas stock market was a top performer in 2016 despite it's people eating dogs and cats, having the highest murder rate in the world and triple digit inflation.  People will be fleeing all fiat currency shortly, so yeah the US stock market may going to the moon Alice.

sheikurbootie's picture

Donald Trump makes as many mistakes as Chuck Norris.

ptoemmes's picture

From now on the term (individual) investor shall no longer be used in print or uttered in words.

yttirum's picture

Yeah, okey. Trump wouldn't be considered a "best" CEO? What metrics are you running? Gates, Zuckerfuck, Bezos, Apple, GM, etc? - All government and multi-national backed squid systems.

I think I'll take the Trump metric over yours, thanks though.

Dode415's picture

The man managed to bankrupt a casino so if you mean great by being able to achieve the impossible he's definitely your man haha

0hedgehog's picture

"Trump is making a rookie mistake. He is setting up the stock market..."


The stock market is most certainly a setup however Trump is not guilty of setting it up since it has been setup for quite a while, long before Trump was involved.

indygo55's picture

Right, and look who is writing the tax plan. It's the EX President of Goldman Sachs Gary Cohn. Yesseriee ladys and gentlemen, the EX president of Golman Sachs and he came over to the Trump administration just to do that. Hummmmm, so waddya think he's up to? Just to remind you all the 1929 crash was "engineered" and if you don't believe that you've been watching TV way too long. The bargains that were had in 1933 were the deals of a lifetime. Things are looking waaaayyyy too set up for me to jump into the "market".


0hedgehog's picture

Keep your friends close....keep your ememies closer!

0hedgehog's picture

The one thing that Trump CANNOT be accused of is being a "rookie"

ZeroBeek's picture

Trump, the new Gartman!

barysenter's picture

President Trump should immediately stop issuing bad checks to federal employees and EBT. Even the H1Bs tell me they are scabs, economic tourists and have bug out plans for the moment things get dicey. Oh, they'll come back. After we pay for it. Forget 'em. Pay all their sponsors back in kind.

Dode415's picture

In the press conference he laid the ground for a run to Dow 30000 - rahther than having an imminent tax plan to disappoint people as he suggested the last couple of days he's now put it back until April at the earliest because they have to sort out obamacare first. It buys him an extra couple of months to ramp the market every day by uttering the words "yuuuge tax plan" for the algos to react to on a daily basis

hannah's picture

central banks print money to buy stock for last 50 years and this is somehow trumps fault when it crashes....right.

francis scott falseflag's picture


Did the Deep State call for the market's lift off so no one would notice Mattis' invasion of Russia?

roadhazard's picture

You smokin' the good shit? If you are stop because you are wasting it.

francis scott falseflag's picture


You have no idea what's going on in the world, do you?


That's so cute.

Davidduke2000's picture

Before a single soldier set foot on Russian territory, the ICBMs will be on their way.

moorewasthebestbond's picture

The bigger they are, the Harder They Fall.