Now that the Republican party has gone full Heisenberg¹, the election that will produce the next US president comes into somewhat clearer focus. And while much remains unknown and undone, the odds are that the two main candidates – Hillary Clinton and Donald Trump – are presumed to be determined. Therefore, and despite the musings of the Oracle of Omaha² on the importance of who is the next head of the world’s sole superpower, let’s take a moment to look at one of the candidates, Donald Trump, and specifically an essential element of his modus operandi.

A key aspect of Mr. Trump’s style can be summed in one word: unpredictable. His quest for the presidency has been unpredictable to many but it is self-described style that I want to focus on.

Mr. Trump has said on numerous occasions and clearly believes that being unpredictable is a source of strength. In his world view it gives him – and other strong men he admires – leverage over another. Throughout his business career being unpredictable has, no doubt, served him well and is a necessity when negotiating a deal. Therefore, he apparently believes that, since this works well for him when negotiating a deal, it’s a good thing to do when it comes to his new vocation: politics and the economy. Unfortunately, what Mr. Trump fails to realize is that businesses and especially financial markets are not particularly fond of unpredictable situations – let alone US commanders-in-chief.

Businesses have to plan ahead. It is tough enough in the highly competitive globalized world of business to turn a profit and grow the business. Furthermore, senior corporate managements are beholden to shareholders and stakeholders that depend on them to achieve their assigned goals – which in the case of institutional and activist investors is to achieve a rate of return and growth rate no less than and preferably in excess of their cost of capital. Functioning in a less clear, less predictable world makes their job that much more difficult.