What an Obama Victory Might Mean for the Markets 20 comments
an article to
-
Font Size:
-
Print
- TweetThis
By Kris Tuttle
In the context of economic uncertainty, financial system turmoil and a major election year, it’s not surprising the market has been all over the place.
But as things begin to become more clear, we expect investors to be more willing to make commitments. The fact that Obama has rolled in the past several primaries and now leads in delegates is beginning to feel like a leader for the democrats has emerged. Texas and Ohio could rock the boat but again it feels like the campaign message around "change" has stuck for Obama and we are past the point where that momentum can be stopped.
We are far from political experts but as the election outcomes sort themselves out investment scenarios are easier to consider.
Oddly we are most bullish on the prospects for what an Obama victory would do for the US markets. There’s not as much difference in the economic policies between democrats and republicans as their once was. Although the economy and the financial markets need some cleaning up, this will happen under any election scenario over the next 12-18 months.
What we like about an Obama victory is that it can very materially change the world perception of the United States which has suffered terribly under the Bush/Cheney administration. We know that deficits can lead to weak currencies but in the case of the dollar a healthy part of the weakness may also be a reflection of the lack of confidence in America.
We’re not naive enough to think that Obama will change the country overnight or believe that he won’t make mistakes. But a figure like Obama inspires an image of the U.S. as a place where equality, opportunity and possibility are very real.
A little less uncertainty and an improved appetite for things American, including the dollar, should help the market recover over time. We also don’t think current low valuations are "deceptive" at all. While some estimates may still need to come down we are still looking at sub-15 P/E ratios in most cases. In the crash of 2000 we had stocks that were trading at that multiple of *sales.*
Count us as constructive. Our top positions continue to include Dell (DELL), Intel (INTC), Apple (AAPL), Cree (CREE), Alliance Data (ADS), and Microsoft (MSFT).
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
David Fry
-
2
TraderMark
-
3
Don Dion
-
4
Cliff Wachtel
-
5
Joseph L. Sha...
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
In WWII, the U.S. won the war. As a result, the U.S. flourished.
With Vietnam, the U.S. lost and suffered nasty stagflation.
If the U.S. loses the Iraq war, the U.S. would suffer severely at a time when the rest of the world is waking up and making great progress. It is disappointing to hear fellow U.S. citizens talk about leaving Iraq just as we are starting to make clear progress.
I believe that we should have never gone into Iraq. However, now that we are there the best we can do is be committed.
I will brush up on my Spanish, because I am prepared to flee to Mexico after we lose the Iraq war and our enemies, with their new strength and power start to arrive in the U.S. with their nukes to take pot shots.
Don’t build that border fence too high. It could work against us.
With Vietnam, the U.S. lost and suffered nasty stagflation."
I hope your investing is better than your history. WWII boosted the economy because of enormous increases in industrial productivity bankrolled, in large part, by the Govt. Before WWII, the US was not the huge world power it is today. These conditions did not exist post Viet Nam. What DID exist was price-fixing by OPEC, which dragged on the economy.
As for progress in Iraq 1) I don't see it 2) Maybe he wouldn't do a total pull-out; regrouping the troops around the oil fields would be a reasonable compromise 3) I don't see Iraq as strategic. I do have concerns that weakening Iraq has made Iran more dangerous. Bush won the shooting part, but by firing the Baathists, he fired the only competent people in the whole failed state. You've got Shiites running the show in Iraq now, for goodness sake!!!! I also worry about Afghanistan slipping into chaos, and worry even more about what happen if some kook takes out Pakistan's Musharef and gains control of his nukes. I'm hoping we have a secret plan--hopeful not conceived by some Bush appointee-- for spiriting Pakistan's Nukes out of the country if something should happen to their Govt!
"I will brush up on my Spanish, because I am prepared to flee to Mexico"
Hey, the dollar is still worth money down there, but I thought you Neo-Cons hated less-lighter-skinned peoples.
Also again, I feel that as a result of losing the Viet Nam war and bailing out on the problems that the U.S. created in other countries, the U.S. image abroad suffered.
The images and stories coming from Viet Nam were too difficult for Americans to deal with. It was a time for spoiled American youth to experiment with drugs and a sexual revolution instead of making the sacrifices that are required for real improvement and the confrontation of real difficulties to help people who really need it. Instead, the U.S. has a reputation for backing out immorally and conveniently whenever we feel like it.
Concern about the United States image abroad is a much more serious issue now, then at the time of Viet Nam as the world continues to be much more smaller and interconnected. You are seriously right that there is a big domino effect here and a little bit of positive U.S. image can go a long way and a little bit of negative image and really damage.
You don’t see Iraq as strategic?
I see it as everything. What would happen if the U.S left Iraq? Again, Obama would simply call this action, “pulling out of Iraq”, the rest of the world overwhelming calls it losing the war in a big way. Why can’t Obama be honest?
Have you seen how empowered Hamas became after Israel unilaterally gave back land to the Palestinians under pressure? The Hamas cheered in the streets. They said that it proved how useless the peace talks between Palestinian Authority and Israel were and that the only way to get what they want is through violence and the inhumane treatment of others. This is the attitude the U.S. will be promoting in Iraq if they lose the war.
However, the Palestinian territory is nothing compares to Iraq. Saudia Arabia has the most oil. Iran is number 2. Iraq is Number 3.
By pulling U.S. troops out of Iraq, the current government of Iraq will falter and those who have supported the Iraq government and the U.S. will be targets. The enemies of the current government will fight each other for power in the violent new power vacuum. A new civil war. A new dark age for the region. Finally, those who post the most beheadings on the Internet will win the power grab and become billionaires. Iran will continue to make gains under the weakness and then take over Iraq just as they had tried during the Iran-Iraq war from 1980-1988. This time there will be no one to stop them.
This is a huge concern for Saudia Arabia, the world’s largest oil wealth and next in the domino line.
Obviously, the Iraqis and Saudis would have wished that the U.S. never showed up at Iraq on March 20th, 2003. However, now that they are there, there worst thing the U.S. could do is leave their mess behind and turn their back on ensuing civil war.
There is only one peace that a people can have – that is the result of a far superior military then those who try to take peace away. Somehow, Barack fails to mention this. Is this deception? Maybe deception light.
I don’t get it.
Does Barack have a conscience?
I may have to flee to Montana instead of Mexico.
"as a result of losing the Viet Nam war,... the U.S. image abroad suffered."
The Stagflation of the 70's was mostly due to OPEC; ask an economist.
en.wikipedia.org/wiki/...
The Viet Nam War was irrelevant; it was a proxy war against Red China. Richard Nixon (Republican) kissed and made up with China before leaving office in disgrace, opening the door to the US losing thousands of jobs to China so our business "leaders" can save a few pennies on labor costs.
"The images and stories coming from Viet Nam were too difficult for Americans to deal with. It was a time for spoiled American youth to experiment with drugs"
The war was televised. TV was the "new media"; the internet of the day. Hippies burning flags probably made good copy, too. Drugs were not new in the 1960's. You've heard of Peyote use among Native Americans? The Opium Wars of the 1860's? Sherlock Holmes' "7% Solution" (cocaine)? The difference in the 1960's was that there were new drugs (LSD, synthesized in 1938). "Prior to October 6th, 1966, LSD was available legally in the United States as an experimental psychiatric drug"--Wikipedia. I think a lot of the drug use in the '60's came in before it was known how harmful it was. Smoking tobacco was certainly more prevalent then, as well. The drug thing was an unfortunate episode and ended up causing much suffering and death.
I think a lot of good came out the '60's, in spite of the war and chaos, though. Jimi Hendrix; Eric Clapton; Miles Davis' fusion period; Andy Warhol; Martin Luther King; the Voting Rights Act; Woman's rights; Silent Spring; the Beatles.
"Saudia Arabia has the most oil. Iran is number 2. Iraq is Number 3. "
So, why'd we attack number 3 first? Iran had the nuttiest Government. Saudi Arabia had the most oil, and that's where 15 of the 9/11 terrorists ACTUALLY CAME FROM. Bush forget to look at a map? Or does he have Oedipal issues with his dad?
"Have you seen how empowered Hamas became after Israel unilaterally gave back land to the Palestinians under pressure?"
Hamas and the Palestinians routinely blow up innocent civilians. I saw the news footage of them cheering in the streets after 9/11. I agree with you on this point. I see NO reason why any civilized person should believe they are entitled to any consideration, whatsoever, at this point. I think Israel was foolish to make unilateral concessions.
"the current government of Iraq will falter " By staying in, more US troops come home in body bags. I see no point in propping up the current Govt.; it's Shiite. In general, it seems to me, the Sunnis are rather more mentally stable (recalling the Iranian capture of the US embassy in Tehran in the '70s). Also, I think, by staying there, Iran feels we are overstretched, and they feel license to cause mayhem in the region. Maybe we can find those unemployed Baathists and put them back in charge...
"I may have to flee to Montana instead of Mexico."
Rumor has it that Bush has a place to hide out in Paraguay. You know, down the street from all the retired Nazis in Argentina.
So, do you like Hillary? Certainly, the economy was great under her husband. Though I didn't care for NAFTA....
This thread is just naked campaigning. Of course it matters who is president - if we can find out wheather the players are real.
illegals a driver's lic. BAD IDEAS. I'm writing in Ron Paul just
to note my independence on the subject. Then I can say "ahhh
I told you so...." :-]
mr mc cain knows how to get things done better than clinton and obama
Taxes are like investments. I don't mind shelling out tax money (within reason) as long as the return is good. As I see it, my family is shelling out-- I don't know-- 5-10 K a year directly to Halliburton-- I mean "The Iraq War". I'm not seeing much return; over here we have no investment in energy research; no healthcare; poor public transit; NCLB gutting our school system; bridges failing; levees leaking; toxic FEMA trailers; lawless attacks on civil liberties. Is it too much to ask for some efficency and/or accountability in Govt spending?
As for illegalss-- people should be "legal", but I'd rather have licensed illegals driving in my neighborhood than illegals driving around without any driver training.
As for the Democrats: i'd like to see better ROI on my tax money; I'm not getting that from the Republicans. I'm not looking for miracles, or anything.
I also happen to think Apple is a bad investment – they focus on trendy teens products - very fickle especially during a recession. Sorry Kris.
As to US's image, here is a sentence from the lead editorial in today's (2/15/08) Financial Times: The forced withdrawal of US troops from Lebanon in 1984 was considered in some Washington circles as America's most humiliating defeat since Vietnam.
Gee-- all the adults around me use computers. Many people in my workplace use iPods-- not teens. Many have cell phones. Maybe you should go back to the typewriter Mr. Dominick.
"Obama's economic adviser is an econ professor at U of Chicago"
Which one? They are of variable quality (though it is quite an excellent school, overall).
As for Lebanon-- that was on Mr. Hawk Reagan's watch, at his order. Hindsight is 20/20. I view the withdrawl from Viet Nam as perhaps hasty, but rationale. I didn't think we had much business there. We clearly have a need to police the Middle East to some extent--all the Govt.s there need close supervision and we are the only SuperPower left (though thanks to our foolish trade policies, China is on the rise). The trouble with the Middle East seems to be that there are lots of psycho people over there. Maybe it's the desert sun. I don't know if Reagan could have foreseen the consequences of pulling out of Lebanon, but I think we DO need to keep helping Isreal as an important facet of foreign policy. It's the only sane, rational Govt. over there. Even Turkey has gone to c**p--possibly Bush's fault, because his Iraq war emboldened the Kurds, who are Turkey's enemies.
I think my problem with the Iraq war is that I don't believe we should have so many troops in harm's way. I would rely more on air power and would focus on securing the important parts of Iraq-- the oil wells-- rather than worrying about downtown Baghdad and the otehr cities.
as for hillary she promised us health care for everyone when her husband was president. what happened to it. she got paid for saying that and never gave us health care. now she is running on the same lie.
Since the post Hilary has hung in there but we'll see what happens in PA. Taxes, the economy, and the deficit are all import issues. But I still think the real issues around the currency and the economy is that the world doesn't think the US is the place to be on a personal or a business basis. I think that's a wrong view that can be changed. (Oh no, there I said it.. change.)