E Having Access To President Trump's Innermost Thoughts Is Killing Traders

It seems that information overload has infiltrated our culture like never before, and that's bad news for the vast majority of retail traders and investors if you ask me. "More is better" doesn't apply to information in a time when the S&P 500 is hypersensitive to presidential remarks and there's no shortage of those remarks, to say the least. That's not a commentary on the President himself, but on the milieu with delivers his innermost thoughts to our phones instantly, with markets tremulously reacting before anyone really has time to absorb what's been tweeted.

Obama was on Twitter too, but he wasn't known for tweeting anything that actually moved markets, so the nation is in uncharted territory with Trump's verbose version of transparency. I've been in the investing game through multiple presidents and haven't seen an equities market this reactive in a long time, and perhaps ever.

Now, I constantly tell my followers to "be reactive, not predictive," but this is a different brand of reactivity. We have to distinguish between reacting to fundamentals-based data and overreacting to every word and phrase, which is no recipe for success long-term. Frankly, we can't blame the President or Twitter for this; it's our own fault as an investing/trading community that's constantly jumping the gun rather than accumulating dry powder in anticipation of bona fide setups.

Courtesy: William Watts, MarketWatch

This will only get worse, of course. While I don't have a crystal ball, I can envisage a future in which economic data is fed to the public through a medium that resembled Tinder more than Twitter: "Swipe right if you're bullish, left if you're bearish..." At that point, the stock market will be 100% voting machine and 0% weighing machine, and the divorce between markets and fundamentals will be complete.

Okay, so it might not be as bad as all that... or maybe it will. Until then, let's all calm the heck down and turn down our sensitivity gauges, if only long enough to place a trade based on reason and not reaction.

Disclosure: David Moadel is not a licensed or registered investment advisor, and has no position in any securities listed herein.

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Angry Old Lady 1 month ago Member's comment

What are you thoughts on Trump now? Seems like the whole country is going to hell!

Harry Goldstein 11 months ago Member's comment

It truly is amazing how times have changed. Even a few years ago this wouldn't even have been a concern.

David Moadel 10 months ago Author's comment

Indeed. Thank you for the comment Harry

Cents For Sense 1 month ago Contributor's comment


Carol W 1 year ago Contributor's comment

I don't agree. If anything we should turn up our sensitivity gauges now and see if this runaway train can be stopped. I doubt it will but it's better than lying down and letting it run us over. And it isn't data overload. It's one man, the President who has inextricably tied himself to the stock market via his war with the fed and the dollar. That's pretty unprecedented. He's the most vocal and dangerous president to the markets we've ever had.

Danielle Rogers 7 months ago Member's comment

I think the impeachment will actualy help Trump in 2020.

George Lipton 10 months ago Member's comment

Get used to it Carol, I bet #Trump will win a second term.

James Madison 11 months ago Member's comment

It may be one man, but Trump is a man that half the country supports and a man whom can instantly reach millions of followers with a push of a button. That's REAL power.

David Moadel 1 year ago Author's comment

Thank you for the comment Carol

Gary Anderson 1 year ago Contributor's comment

Apparently his outermost thoughts are destroying Walmart customers in El Paso. As far as Wall Street is concerned, it never should have trusted the Tariff Man. His innermost thoughts were formed 40 years ago. Wall Street never figured that out. As far as El Paso, it is a sad day that likely should never have happened. There were racial issues present as the shooter was molded in Collin County, his home county. It is a tragedy that started with words and ideas that we fought a World War to defeat.

Corey Gaber 11 months ago Member's comment

Gary Anderson, I may not be a fan of #Trump, but I don't think you can blame him for El Paso. That's a stretch.

Gary Anderson 11 months ago Contributor's comment

If I were to cede that point to you, POTUS would continue his relentless assault on minorities. I don't fault you from being distracted by his tweeting onslaught. But it is hard for any of us to observe his rallies without seeing the poison. Recently, a friend of my daughter was stared down by an angry fellow wearing a Nazi tattoo. That sort of thing is way more commonplace than you think. Trump's followers do not have to pack in order to scar.

Corey Gaber 11 months ago Member's comment

To clarify, I do agree with you that #Trump's remarks have emboldened many with racist views to come out of the wood work. His rhetoric is often downright disgraceful. But did the El Paso shooter specifically link his attack to Trump? I may have missed it but have not read any such thing. And if not, I don't think it's fair to create such a link yourself without evidence to support the claim.

Gary Anderson 11 months ago Contributor's comment

Hi Corey. I appreciate your thoughtful response. Unfortunately, the shooter referred to the invasion at the border in his manifesto, according to the NY Times. I am sure Trump's language speaking to the invasion was made for political gain. But POTUS simply lacks understanding regarding the impact his words have on his listeners. It seems to be a criminal lack of understanding in my opinion.

Carol W 11 months ago Contributor's comment

Gary, your comment has nothing to do with the article and your comment makes no sense anyway - take your political opinion to Twitter where it belongs.

Cents For Sense 11 months ago Contributor's comment

Everyone has a right to an opinion.

Gary Anderson 11 months ago Contributor's comment

Carol, we can't even measure how much racism plays into Trump's tariff wars. So, I personally believe there is a connection. If he weren't a racist would he still attempt to tear down China, the nation that bailed us out of the Great Recession?

John Doe 1 year ago Member's comment

#Trump needs to leave all the tweeting alone.

Angry Old Lady 10 months ago Member's comment

Good advice John, but it will never happen.

David Moadel 1 year ago Author's comment

Thank you for the comment John.

David Moadel 1 year ago Author's comment

Thank you for the comment Gary