Short PositionEven in the absence of legislative change, political expectations will support the company's ability to continue to raise capital. I expect to short it again someday. By contrast, Cable Car did not adjust its short position in World Acceptance Corp (WRLD) . I believe early market predictions of the Consumer Financial Protection Bureau's demise are greatly exaggerated, and a challenge to Director Cordray's authority may be delayed pending a legal process.
Speed UpEven if threatened by the incoming Congress, in my opinion, the bureau still has plenty of time to complete ongoing enforcement activities, which are the work of rank-and-file attorneys as opposed to political appointees. Although doubt has been cast on future rulemaking, if anything, I expect increased political pressure on the agency to accelerate the timeline for the CFPB to bring cases or reach settlement agreements with companies it has already served with notices of potential legal action.
Photo Credit: Gage Skidmore via Flickr Creative Commons
The post Trump Trade appeared first on Smarter Investing Covestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures. For information about Covestor and its services, go to http://covestor.com or contact Covestor Client Services at (866) 825-3005, x703.