Back on June 29, 2016 I wrote a post suggesting Brexit = Y2K suggesting it was a non-event and stated:
“BUY THE POUND AFTER THE TROUGH.
England may rid itself of Scotland and Northern Ireland (areas that receive more government revenue than they contribute) making England stronger. London, like Zurich, are both outside the EU. Both are the European money centres. Will finance go to Frankfurt? No. London will get stronger. England with out the UK (Scotland and Northern Ireland) will be the new Switzerland. Let the Pound decline, but get ready to buy English/London stocks.”
The Pound has now rallied for 4 days. Business Insider in its normal hyperbole has used the word “surging”. Maybe a little strong, as the cable is still down from the $1.48 region, but the rally is here and should continue (probably not all the way to $1.48 but $1.40 is possible).
The second part of my thoughts was being ready to buy UK stocks, but a lower risk trade in my mind is to buy UK stocks and short German stocks. I think the trade has more room to run.