When the Emperor was Divine, is a historical fiction novel by Julie Otsuka. The story loosely follows her family’s wartime experiences in a U.S. Japanese internment camp during WWII. In the novel, Ms. Otsuka tells an emotional story with contrasting unsentimentality. The daily title is meant as a play on the novelist words.

As the market ended an emotional week, the analysis of what’s to come must be told with similar contrasting unsentimentality.

Like the beautiful (and ancient) kimono pictured, the market is draped with silk, yet embroidered with skeleton heads.

From the private collection of Arnold Lieberman-Art Dealer, Santa Fe, NM

What should investors do when the Emperor, who drives the price, does so in less than a divine fashion?

A pattern that has emerged, considering we have a President who makes all of his thoughts known, is trading those thoughts, and then evening up before (if ever) thoughts turn to actions. If you look back over 2017, and now into 2018, the money to be made just on that course of action, is what I now see as a gift.

One example from 2017 is the proposed infrastructure plan. Trump promised that his plan will leverage $1.5 trillion into new infrastructure spending.

The best indicator to see how that sentiment was received by investors is the Transportation ETF, IYT. In anticipation that the plan would be released in early 2018, late 2017, IYT rallied from $170 up to a peak of $206.73. Nice move if you bought his promise. The reality of the plan introduced at the end of January, resulted in IYT crashing from its zenith price, all the way back down to $176.62.

Why?

Although truly a bipartisan issue (everyone agrees infrastructure is a necessity), Trump’s plan counts on spending money unaccounted for, increasing the debt further, and potentially raising taxes-after he accomplished lowering them.

The most recent example, hot off the press, is Tariffs. On Thursday, Trump announced he would place a 25% tariff on steel and a 10% tariff on aluminum.