Brexit hedging?

[TooLateForAName]

Just curious...

With the referendum coming up, what are people doing/planing with regard to brexit ?

If we vote out then I'd expect significant falls across all of europe.

[Ozzie Osmond]

Tin foil hat?

For the markets I suspect that any outcome which gives certainty may prove positive. If UK chooses to tow itself out into the mid-Atlantic I think it's the people who will suffer more than big business.

[davepoth]

TooLateForAName said:

Just curious...

With the referendum coming up, what are people doing/planing with regard to brexit ?

If we vote out then I'd expect significant falls across all of europe.

Chances are that there will be significant falls all round. But since it'll take two years for anything to happen it'll bounce back reasonably quickly, perhaps with the exception of Sterling exchange rates.

The actual market effect will take a lot longer to become apparent.

[Behemoth]

TooLateForAName said:

If we vote out then I'd expect significant falls across all of europe.

Never mind Europe, it would provoke a worldwide recession. It's exactly the sort of event to tip the array of dominoes that are wobbling from China to Brazil. Especially if the outcome is too close to call & so cannot be priced in to the markets beforehand.

[rdjohn]

It would be at least 2-years after 24th June before anything different would happen, so hardly any real need for panic decisions.

My guess it would actually be somewhat longer to get an acceptable and orderly deal. So it would be easy to be wrong footed by a knee-jerk decision.

[Simpo Two]

Which reminds me, how is Greece doing? The refugee crisis can't have helped their position.

[walm]

TooLateForAName said:

Just curious...

With the referendum coming up, what are people doing/planing with regard to brexit ?

If we vote out then I'd expect significant falls across all of europe.

FX-hedge: short the GBP vs. EUR or USD.
Disadvantage: will pop if we vote to stay.

Non-hedge: short the FTSE 100.
Problem here is that a significant chunk of FTSE earnings are non-GBP denominated which will rise dramatically as the GBP falls, supporting EPS growth even if the UK-based part slows down.

My personal preference is for a high-multiple cyclical consumer-focused UK-only business.
While these will do OK in a vote to stay, it won't be dramatic and they will certainly fall hard if we vote OUT.