Seeking Alpha

Smarter Investor's  Instablog

Smarter Investor
Send Message
I have been an active and successful investor for decades. Now, as an analyst, my aim is to figure things out from a practical standpoint, appying logic, reason and common sense to markets that often seem to have no sense. The goal is to provide clear and understandable suggestions for middle to... More
View Smarter Investor's Instablogs on:
  • TOO-BIG-TO-FAIL BANKS ARE INVESTING IN MITT ROMNEY!
    Open Secrets has compiled some very useful Federal Elections Commission statistical data about the candidates running for President. Here is a comparison between the top contributors of the two frontrunners in the Republican race. About 48% of Ron Paul's and 10% of Mitt Romney's campaign funds came from "small" individual contributors pledging less than $200. 

    Paul has some companies giving him money, but no six figure supporters.  The majority of Romney's six figure and up contributors are people who contribute to bank sponsored PACs.  The companies listed did not make the contributions themselves.  Generally speaking, the numbers represent contributions collectively obtained and donated by the PACs (Political Action Committees) the listed companies sponsor. 

    There is no question that money helps people get elected.  Romney's war chest is almost 3x the size of Paul's, and he is leading in the polls.  The real question is whether heavy investment, dominated by a particular industry, ends up paying off in terms of corporate profits?  Or, are these contributions going to end up just a mere "public service"? 

    Do industries that contribute heavily to a winning Presidential candidate do well afterward?  It is hard to say.  But, governments do control some critical factors that can result in profit or loss in certain heavily regulated industries.  Easy money makes the stock market go up, and that can result in trading profits.  Low interest rates increases the probability that otherwise "bad" loans won't go bad.  Low rates also tend to increase the spread between the cost of Federal Reserve derived loans, and the return on other investments. 

    Given this, it is important for investors to follow political developments, even if they have no real interest in politics. Romney has a commanding lead in the Republican primary.  Assuming the grass roots supporters of Ron Paul don't manage to upset his apple cart, and Romney manages to evict Barack Obama from the Oval Office, investors may want to consider buying shares of the banks who contribute heavily to Romney's campaign.

    MITT ROMNEY:
    Goldman Sachs(GS) $367,200
    Credit Suisse Group(CS) $203,750
    Morgan Stanley(MS) $199,800
    HIG Capital $186,500
    Barclays (BCS) $157,750
    Kirkland & Ellis $132,100
    Bank of America (BAC) $126,500
    PriceWaterhouseCoopers $118,250
    EMC Corp (EMC) $117,300
    JPMorgan Chase (JPM) $112,250
    The Villages $97,500
    Vivint Inc $80,750
    Marriott International (MAR) $79,837
    Sullivan & Cromwell $79,250
    Bain Capital $74,500
    UBS AG (UBS) $73,750
    Wells Fargo (WFC) $61,500
    Blackstone Group (BX) $59,800
    Citigroup Inc (C) $57,050
    Bain & Co $52,500


    RON PAUL
    US Army $24,503
    US Air Force $23,335
    US Navy $17,432
    Mason Capital Management $14,000
    Microsoft Corp (MSFT) $13,398
    Boeing Co  (BA) $10,620
    Google Inc  (GOOG) $10,390
    Overland Sheepskin $10,350
    IBM Corp (IBM) $8,294
    US Government $7,756
    DUNN Capital Management $7,500
    Corriente Advisors $7,500
    Greenstreet Co $7,500
    Northrop Grumman (NOC) $7,272
    Lockheed Martin(LMT) $7,208
    Intel Corp (INTC) $6,855
    US Dept of Defense $6,524
    United Technologies (UTX) $6,316
    Federal Express (FDX) $6,255
    Entergy Corp (ETR) $5,950



    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Tags: CS, UBS, GS, BCS, MS, JPM, BAC, WFC, C
    Jan 17 6:07 PM | Link | Comment!
Full index of posts »
Latest Followers
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.