Let me start by saying that I did not have a dog in this fight. If only because I prefer younger candidates for this very important office and not only for the US but much of the rest of the world.
In 2016, I preferred Hillary Clinton and was hoping she would win. Trump was too much of a shock guy to me. Hillary mishandled her campaign by treating Trump as an amateur and insulting his followers (remember "deplorables"?). Being cocky and ignoring your opponent is never a good strategy, not just in politics, but also in trading, where your opponent is Mr. Market. I would say, in life, in general.
Trump won not only because of that, but also, if not primarily, because of all the help he received, perhaps rather unwittingly, from media. Being a total novelty in a presidential race (not a politician, just a "regular" guy if a billionaire can ever be considered such) and quite a maverick too, he was getting tons of exposure in the media. This outsized exposure came with very little questioning of his future policy and most of what he was saying. He played the media like a fiddle. The media made him president more than they would now be willing to admit it if only because that would expose them as empty suits. But that's exactly what Trump did: he showed the world that the US media is not exactly the bulwark of democracy that it is sometimes portrayed to be; usually by the media themselves, so that's self-serving, and, no wonder, not exactly true.
Once he became the US president, the media turned against him; most of them, anyway. Just as much as I didn't like the exposure he had been getting in the runup to the election, I did not like that now the media was stigmatizing him. Even though, at first, I was rather critical of him, after a year or two of his presidency, I came to the conclusion that he was not that bad. Certainly not as bad as the media was trying to make it.
The financial markets were proving this too. The economy was booming. It was Hillary's husband, Bill Clinton, who ran his first successful presidential campaign on the slogan "It's the economy, stupid!" and by this standard, quite reasonable indeed, Trump was doing well as the holder of the highest office in nation. Not insignificant is also the fact that despite coming across as more combative than most US presidents in recent history, he started no wars, let alone questionable ones.
While the stigmatization he was subjected to in the media did not sit well with me, to be fair, he was not helping himself with his frequent and often "in your face" use of Twitter. Being the most powerful man in the world, did he really have to engage in little, sometimes nasty, online fights? He was goading the media and the media was responding in kind.
But that was also part of his strategy, it seems, whether it was intentional or somehow emerged out of his actions.
He is a bit of a chaos or distraction (diversion) guy. His use of Twitter and his shock and awe strategy (much of it shock) is indicative of that. That might have worked, though, being rather unique if not radical. It's possible it was giving him some edge. Unfortunately for him, in early 2020, things changed abruptly when the COVID pandemic engulfed the world and the US became affected by it worse than most developed countries.
The chaos strategy can work under normal conditions. It may then give you an edge. But when the normal becomes chaotic as it did when COVID stroke, making things even slightly more chaotic only makes the whole situation worse. You lose your edge, which now is seeking a return to an equilibrium. What works in one regime, may not work in another. In fact, it may lead to a catastrophic outcome. This is what happened: Trump's response to COVID was ineffective, he misjudged it and, consequently, mishandled the problem. If there is one thing that contributed to his election loss, apart from his aggressive "in your face" attitude that many so detest, it was this very inadequate response to the pandemic.
Prior to COVID, everything seemed to be pointing to his reelection, in my view. COVID changed everything and Trump approached it as if it were an ordinary flu. It was not. Even though I too at first thought the problem would be over in two months or so, it soon became clear to me that this was not going away until 2021 at the earliest.
The moral (lesson) for traders from this debacle is this: your strategy may not work in all conditions, or not equally well, so you need to adjust it or stop using it if only for a while.
Joe Biden is now very likely to be sworn in as the next US President. Considering his rather advanced age, his mind not as sharp as it used to be, which inevitably comes with age, I don't think he is as good a choice for this office as Hillary Clinton was in 2016. It's not obvious he will be a better president than Trump, though I expect him to be less combative, especially on Twitter. His running mate, Ms. Harris, is going to make history by becoming the first woman to be elected US Vice President. One should wish both of them well.
Since the Senate remains Republican and the House is not strongly Democrat (in fact, even less so than prior to the election) this appears to be a situation that Wall Street likes the most and so no wonder the US markets have rallied accordingly. Once the COVID scare is over, things will be back to normal. Probably as soon as the second half of 2021.
