Ripping the plaster off the elephant in the room seems a risky course of action at the best of times but it is something, metaphorically at any rate, I know must do. In any election year, I know I have to come up with a column that might, at least at first glance, pass for political commentary and I know we may as well look to get that over with as quickly as possible.
In the current context, though, this is where the list of things that I know comes to an end. To help make my point I had planned to remind you of the City trader who staked a total of £900,000 in the run-up to last September’s Scottish referendum and won almost £200,000 when the ‘no’ vote the odds had consistently flagged up from the off came to pass.
Having originally read the story on the BBC, however, I made the mistake of for once cross-checking my facts, with my initial reaction – along the lines of, “well, it is not how I would use £900,000 but he seem to have thought it through so fair play” – being quickly and virulently shown by the associated comments section on The Guardian website to be very much only one way of looking at things.
Mind you, I find that quite a lot with most comments sections and, on reflection, my intended point still stands. Speaking afterwards, with the cheque from William Hill nestling warmly in his pocket, the trader had commented: “This was not a reckless gamble. I’d prefer to call this a reasoned wager. For me it was almost an investment.”
Well, OK, maybe – and good luck squaring that line with your own compliance people, regardless of the basic underlying process of taking a view, backing it up with diligent research and then placing the stake you deem appropriate given financial circumstances.
All I am saying is, in the coming months, the market would kill for even a fraction of the certainty our bold punter professed to have felt.
For, depending on who and what you believe, there remain plausible cases for, come 8 May, the prime minister being David Cameron, thanks to the economy, say, or Ed Miliband, thanks perhaps to the way constituency boundaries traditionally favour Labour, or the balance of power being held by the Liberal Democrats or the SNP or the DUP or that ruddy-cheeked bloke who apparently spends every waking hour down the pub.
One final certainty is that this is going to be a confusing few months for investors – or at least for investors who allow their thinking to be influenced in any way by the many analysts, commentators and member of my own trade, who earn their living from dealing with limited responsibility in the day-to-day rather than the long-term view.
If you doubt me, ask yourself if that City trader will be staking £900,000 on this election result. I bet a whole £9 he would prefer to rip a plaster off a real elephant.
Julian Marr is editorial director of Adviser-Hub and co-author of ‘Investing in emerging markets – the BRIC economies and beyond’
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