Oklo stock tumbles as Financial Times scrutinizes valuation
Polymarket is pricing an 80% chance of a US government shutdown by the end of the day, with decent volume behind - effectively, punters price in a strong base case, we are really shutting the government as per tomorrow.
This has happened multiple times in the past, and while history might not perfectly repeat itself, it’s always informative to look at it.
I am not interested in ultra-short 1-2 days shutdowns, but what happened during prior shutdowns that lasted at least 14 days?
The table below shows the risk-adjusted return (i.e. Sharpe Ratio) for various asset classes during the 4 historical episodes of ’’long’’ government shutdowns.
The outcome is clear:
- Long metals (High risk-adjusted returns, 100% win rate).
- Short USD (AUD, NZD, CAD) are the safest bets, but EM FX also does well.
- Long stocks across the board.
Do you think we will see a US government shutdown that lasts for a few weeks, or will we find a quick resolution?
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