8 Stocks to Buy if McCain Wins 11 comments
-
Font Size:
-
Print
- TweetThis
This week's article will be short and to the point. I’m at the Republican National Convention and so far there is not a whole lot to report on. To date, Hurricane Gustav has had everybody focused on issues bigger than politics. However, as the Gulf Coast appears to have been spared the worst of Gustav’s wrath, the talk once again is returning to the political issues.
One of the big issues being bandied about this week centers around expanding domestic drilling for oil and natural gas. While many Americans support enlarging domestic oil and gas exploration, the Democrats have been more lukewarm to the idea.
If the Democrats win the election, I really don’t see the oil and gas industry taking a huge hit unless the windfall profit tax idea takes hold. (God help us all if it does.) However, if McCain wins it could be hugely positive for the oil and gas guys along with the nuclear sector players.
On a McCain win, oil service stocks like Cameron (CAM), Transocean (RIG), Diamond Offshore Drilling (DO) and Halliburton (HAL) will be huge, huge beneficiaries of more liberal domestic drilling rules. Nuclear stocks such as Cameco (CCJ) and nuclear ETF Market Vectors Nuclear Energy (NLR) could experience massive upside moves.
At some point, the stigma attached to the nuclear industry will fall away under the unrelenting pressure of high oil prices. A quick look at oil prices clearly shows that the commodity is undergoing a consolidation phase. These periods can last quite a long time, even a year or more.
We would be engaging in the worst form of wishful thinking however if we were to believe that the oil run was over. Moderating oil prices will continue to buoy stock prices, but that will only last until oil gets ready to run again. When it does, we could finally have the necessary impetus to get serious about nuclear energy as a viable solution to our domestic energy needs.
The idea of nuclear stocks and coal stocks being growth industries again will strike many investors as odd. But over the summer, we saw coal stocks acting like internet stocks of yesteryear, witnessing massive runs in once staid companies like James River Coal (JRCC) - up almost 150% over the last six months - and Alpha Natural Resources (ANR) - up almost the same amount.
The next major growth industry in this country is alternative energy. Sure solar and wind get all the press, but the biggest investment dollars will flow to the most proven industries. That my friends is nuclear and "clean" coal (clean coal still sounds like an oxymoron to me!).
We as a country may ultimately make the leap to a completely green and renewable domestic energy source, but I can assure you that it will not just magically occur. Nuclear energy along with coal will be among the many stepping stones we use to cross that great divide between where we are now and where we want to go.
It benefits our country greatly if we can keep our dollars busy at work in our economy. Buying 2/3 of our energy from overseas is resulting in a massive wealth transfer from our wallets to foreign countries. Every dollar we spend on foreign oil is one less dollar at work here at home. The diminishing wealth effect of shipping so many of our dollars overseas cannot be overstated. It's an economic imperative for us to staunch the flow of these American dollars into overseas coffers. If opening up domestic drilling could redirect at least a portion of that wealth back into America then it is a policy that requires our utmost attention.
What are your thoughts on domestic drilling? Is this a policy that the U.S. should pursue, if not why not?
Related Articles
|
Find People on SA
-
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 activeSee all
Instabloggers.
Top Instabloggers » -
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 11 comments:
The largest supplier of oil is Canada to the USA.
Looks like Canada will be doing well with their exports.
As far as drilling is concerned, if it contributes to job growth, I say do it. Besides, I do not know a single person who has been to ANWR but know a lot who have gone to Yellowstone.
RIG is another stock with a huge backlog. Best of breed.
We need strong oil companies and oil service stocks to bridge the gap to create alternatives and a strong domestic oil policy. That's the future.
We need a domestic energy policy. We need to rebuild our infrastructure. What we don't need is another spec home or condo. We have plenty at the moment.
The nuclear option supposes that either (a) laws or economics will force coal plants to shut down and be replaced with nukes, or (b) electricity demand will skyrocket due to electric cars. Those are big if's. Republicans are staunchly pro-coal and there is no reason to believe there is a shortage. On the second "if", Americans could just commute to work in smaller cars and cut their gas bill in half if we wanted to (15 mpg Tahoe >> 30 mpg Camry, 20 mpg truck >> 40 mpg Civic). The current fleet of fuel hogs from the first half of the decade will be obsolete in 5 years, but $80k rare-earth-battery-car... still won't be economic.
What McCain will do is start wars. Expect an attack on Iran that will send oil skyrocketing. Expect a cold war with Russia (and perhaps a hot one if Georgia and Ukraine are allowed into NATO). Expect Iraq and Afghanistan to continue to suck money as in the Bush years.
These wars will greatly increase the prices of oil, precious metals, and defense industry stocks, while resulting in a great devaluation of the dollar. More of the same with a McCain presidency.
Dems are staunchly pacifist no matter how determined our enemies are to attack us, even on our own soil. What Baraq *Hussein* Obama will do is attempt to appease fascist leaders of Muslim states...this is not clairvoyance on my part - he has already put his policy in action as shown by his willingness to meet Ahmadinejad without preconditions, and his willingness to publicly bash the U.S. while speaking in foreign lands (i.e. the Berlin speech). I fully expect an economic collapse after a repeat of 9-11 (albeit by another mode?) if Obama becomes president.
What will result in devaluation of the dollar is the ongoing debasing of the American economy, as espoused by Democratic policies which promote higher taxation, increased globalism yielding the exporting of skilled jobs abroad, and a failure to grasp that free-market economics are the best path to prosperity...not socialism!
Good point about the uncertainty of a McCain war against Iran. So far that's only one of his campaign promises, and as we all know candidates often break campaign promises. Nonetheless, the year over year prices of commodities are pricing in the geopolitical risk of these threats. These high prices benefit many of McCain's contributors in the commodities industries, so perhaps if he can get away with inflating commodities prices through war-talk, he migh take that route.
As for the probability that Obama would do the same, you say either party will attack Iran, but that Democrats are all appeasing pacifists. Well, which way is it? And are/were the dictator of Pakistan and the dictator of Saudi Arabia also fascist leaders of Muslim states?
Russia:
People are still arguing over exactly who or what started WW1, but the core reason was a network of alliances that made entire groups of nations responsible for fighting someone else's inevitable local ethnic skirmishes. The expansion of NATO forcefully argued for by McCain might make it necessary for American soldiers to die taking a side in some ethnic/tribal spat in someplace we've never heard of - such as Ossetia. Would you sign up to die in a war because some ethnic group X in Eurasia wants to dominate ethnic group Y? Is that really defending America?
Other points:
Obama's tax cut plan benefits the middle class more than McCain's. Research it. Also, if borrow-and-spend results in high inflation, isn't high inflation a cost just like taxation?
Globalism and free trade treaties have always been argued for more strongly by Republicans than Democrats. Trust me, the UAW is not arguing for most-favored-nation status for China so Chery or Geely can dump cheap cars on our markets.
The Republican Bush administration has in 8 year socialized several companies and industries, multiplying the federal payroll. Did you hear about Bear Sterns, Fannie & Freddie? The airport security industry? Did you hear the rhetoric and not the news?
Campaign promise? Ha...ur sooo hilarious. Nice misread too: Dems are appeasing pacifists...don't take control of situations the way they should, which leads to bigger problems down the road...ala my assertion that they will let our security weaken until we are once again in *reactive* mode, instead of standing firm as Reagan did. Notable recent examples include Bill Clinton not taking bin Laden when he had the chance, his failure to respond properly to the *original* WTC bombing attempt, the U.S.S. Cole attack, etc. -- we knew of al Qaeda back then, as well as other terrorist groups and state-sponsored plots...Clinton failed to act. 9/11 was the result.
Russia and WW1: Nice try. Noone is debating what started WW1. The Russians paid a Serb to take out Franz Ferdinand. Alliances were not the cause - and you can hardly call it a local skirmish when Russia instigates war with the Austro-Hungarian empire! The use of smaller pawns in the "network" was merely an attempt to hide guilt for inception of the war. And yes, it is worth fighting for the freedom of small nations who cannot defend that right against a larger aggressor. Funny how liberals want globalism and diversity when its warm fuzzies, but don't want to put out when necessary!!
Obama's tax cut: I've heard his plan, and there's a fundamental problem with redistribution of wealth. It's socialism. Disincentivization for trying to get ahead. Socialism has utterly failed - the 20th century is enough proof of that! China will be next. It is a system for the lazy - when all get treated the same and there's no incentive to excel - that's what you get. In our case, many are becoming entitled and that is leading us on a reverse course toward socialism. Not good. Yes, borrow and spend is bad. Cut the damm spending already! Our government should be about 1/4th its present size, IMO.
Globalism: not so. Your unions love the ability to sell their products elsewhere. They just want it to cut only one way. Doesn't work like that and the Dems are now realizing their mistake. Furthermore, Dems have been terribly lax on border control and illegal alien labor -- what is that if not an underlying "globalism" that undermines the job security and wage levels of American workers???
Yeah...I heard about BS, FNM, FRE -- and no, I'm *not* pleased!! That much, it seems, we at least agree on. You can't privatize profits and socialize failure...that's akin to guaranteed trades with no losers - we'd all love that, but we know it can't be that way. Gotta own your mistakes and pay the price.
On Sep 11 09:21 AM Chris B wrote:
> Socialism,
>
> Good point about the uncertainty of a McCain war against Iran. So
> far that's only one of his campaign promises, and as we all know
> candidates often break campaign promises. Nonetheless, the year
> over year prices of commodities are pricing in the geopolitical risk
> of these threats. These high prices benefit many of McCain's contributors
> in the commodities industries, so perhaps if he can get away with
> inflating commodities prices through war-talk, he migh take that
> route.
>
> As for the probability that Obama would do the same, you say either
> party will attack Iran, but that Democrats are all appeasing pacifists.
> Well, which way is it? And are/were the dictator of Pakistan and
> the dictator of Saudi Arabia also fascist leaders of Muslim states?
>
>
> Russia:
> People are still arguing over exactly who or what started WW1, but
> the core reason was a network of alliances that made entire groups
> of nations responsible for fighting someone else's inevitable local
> ethnic skirmishes. The expansion of NATO forcefully argued for by
> McCain might make it necessary for American soldiers to die taking
> a side in some ethnic/tribal spat in someplace we've never heard
> of - such as Ossetia. Would you sign up to die in a war because
> some ethnic group X in Eurasia wants to dominate ethnic group Y?
> Is that really defending America?
>
> Other points:
> Obama's tax cut plan benefits the middle class more than McCain's.
> Research it. Also, if borrow-and-spend results in high inflation,
> isn't high inflation a cost just like taxation?
>
> Globalism and free trade treaties have always been argued for more
> strongly by Republicans than Democrats. Trust me, the UAW is not
> arguing for most-favored-nation status for China so Chery or Geely
> can dump cheap cars on our markets.
>
> The Republican Bush administration has in 8 year socialized several
> companies and industries, multiplying the federal payroll. Did you
> hear about Bear Sterns, Fannie & Freddie? The airport security industry?
> Did you hear the rhetoric and not the news?
So we bailed out Bear, Fannie, and Freddie and may have to do more. GM? Why not. Washington Mutual, AIG, and Lehman? A couple of more won't really matter. Why not bail out Mrs. Fields? At least she makes something that tastes good, passes time at the airport while you are being strip searched, and you don't mind eating after it's gone?
Back on point, comrades? I'd most certainly buy CAM and RIG and some others not mentioned in this article like NOV.