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The Republican Portfolio
Let’s say the Republicans take everything in November, what will it mean for your portfolio? This is an easy call to make. Expect a dramatic roll back of the leftward policies the country has adopted over the last two years, and a sudden revival of the industries that have suffered as a result. In fact, if you look at the charts below, many of the stocks I am suggesting have already started to discount a conservative win.
Big oil companies will be huge winners. American oil imports from the Middle East will accelerate, where the industry earns 80% of its profits. That will bring peak oil sooner, easily taking crude over $100/barrel quickly, and eventually to $150 or $200. Restrictions on both onshore and offshore drilling will get rolled back to their Bush era laissez faire levels, cutting costs and boosting profitability. So what if someone dumps a million barrels of oil on your beach. Suck it up and move inland. The stuff goes away by itself any way. You want to own Chevron (CVX), ExxonMobile (XOM), Conoco Phillips (COP), and of course, BP (BP). The drilling and service companies, like Transocean (RIG) and Diamond Offshore (DO), should do spectacularly well.
Coal will benefit immensely from relaxed environmental regulation, paving the way for more exports to China. You want to own Peabody Energy (BTU) and Joy Global (JOYG). Nuclear Energy is a big beneficiary here, which should drive you into Shaw Group (SHAW) and top uranium producer Cameco (CCJ). Forget about natural gas companies, like Chesapeake Energy (CHK) and Devon Energy (DVN). Relaxed environmental controls will stonewall restrictions on the new fracking technology that is unleashing huge supplies on the market, driving prices for CH4 to the basement.
You can count on subsidies for alternative energy to get axed as unaffordable luxuries, which have created 500,000 jobs in California alone in the past two years. After all, global warming is nothing more than a leftist hoax, right? The good news is that the higher oil prices Republican policies are guaranteed to bring means that green companies of every stripe will become profitable in their own right, making subsidies unnecessary. Remember, Bush policies took crude from $20/barrel to $150, topping up the Strategic Petroleum Reserve at the absolute peak. Buy First Solar (FSLR) on the knee jerk sell off after the election.
The Republican portfolio should also have a heavy weighting in defense companies, as an expanded war against terrorism means we will be fighting more wars in more places for longer. Pakistan is a sure thing, if we aren’t there already, and Iran is just a matter of time. Any shopping list should include Northrop Grumman (NOC), Raytheon (RTN), Boing (BA), United Technology (UTX), Lockheed Martin (LMT), and General Dynamics (GD). Also prospering mightily will be the makers of prosthetic limbs for the military, like Zimmer Holdings (ZMH).
Health care is a natural. It is unlikely that we could see a complete abolition of Obama care until 2016 at the earliest. But a Republican win in the House would eliminate the possibility of any expansion of socialized medicine. Health care companies like United Health (UNH), Humana (HUM), and Pfizer (PFE) will do well.
The government’s war on for profit education will grind to a complete halt (click here for my last piece at http://www.madhedgefundtrader.com/august-18-2010.html ). With a tidal wave of government subsidized loans to the industry assured, and hapless students stuck with the bill, companies like DeVry (DV), Strayer Education (STRA), and Corinthian Colleges (COCO) will rocket.
Major tax cuts for the top 3% of income earners costing $700 billion over ten years and more loopholes for corporations pared with increased defense spending promise to send federal deficits through the roof. That will last bring an end to the 30 year bull market in Treasury bonds, which are teetering as I write this. The double short Treasury ETF (TBT) will have to be a core holding in any long term portfolio.
As the two parties are diametrically and violently opposed to each other on virtually every issue, the impact of a regime change on the economy and the markets promises to be huge. I could write on this for days, so these are just the high points.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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Damn, and here I was so looking forward to TEOTWAWKI, and you go and make the future even darker than that -- thanks for nothing!
If I wanted to read partisan political invective, there are plenty of other websites I could turn to. This one would fit in well on Huffington post.
There is not a dime's worth of difference between the Dem and Rep parties.
"This one would fit in well on Huffington post."
Don't stop there: It would fit well on RedState, Townhall, HotAir, Malkin's blog, etc. etc. etc.
i guarantee you that if republicans take everything in november not one god damned thing will change....nothing....you could vote republican or democrat and expect the exact same result...
the rino vs tea party vote in delaware is proof of that....i am so glad karl fuckface rove's candidate lost....someone should shove a pig poke up his ass.
Agreed, Rove can go screw himself. I felt the same about Hannity when he trashed Ron Paul. It is not about the Dems or Pubs- neither of these are truly conservative, small government platform (ok Pubs are in name only). Tea Party winners go to the Pubs because the Dem's position is simply incompatible with anyone but welfare receipients and 99 weekers. Lets just hope the Pubs don't corrupt them into spending more.
After a simple operation, removing your "moral outrage" lobe, you too can become a Political Pundit!
C'mon guys, you really should refer to Karl by his Christian name: Turd Blossom.
What is this guy?
Some kind of communist nut?
Haven't we learned our lesson yet?
Haven't we learned that government interventions in the market do not result in a more prosperous society?
For the author, here's some real environmental economics:
http://fascistsoup.com/Forums/viewforum.php?f=18
There was some sort of id10tic Academic on CNBS this morning trying to argue his way out of the logical inconsistencies in his head in favor of having the Govt "Do something" to solve the mess they got us into. I finally hit the mute button cause it was too stupid to listen to. Why does it NEVER seem to occur to anyone that Govt meddling is precisely what is paying out the rope that will hang us all??
At this point, I'd be grateful for an impasse, and I'm not even a Republican. A stalemate between the Marxist in Chief and Congress would be a good thing!
Yay! Another vote for gridlock! The best we can hope for as long as most voters continue to do the same thing over and over: Vote for either a Decepticrat or Republicon!
The sad part of the whole thing is that utter gridlock probably offers the best chance of keeping the whole ponzi/charade/fraud going.
Spend til we can't or save til we starve. WHEEeeeee!
morksist, maybe...
but, marxist?!?
MHFT - might want to consider the Tea Party Portfolio. "Republican" means nothing these days
Considering the Teabonics I've seen, probably a dictionary company would be a good investment:
http://www.flickr.com/photos/pargon/4468908929/in/set-72157623594187379/
teabonics...
Obviously not! You have to be able to spell a word to look it up.
MHFT - you attracted all the obamites like bugs to a light. these are the guys who voted for obama, got conned, and now, instead of apologizing angrily declare that ALL politicans are the same (a 5 year old can see they are not) to conceal their error and inter angst. they read the truth on ZH everyday but do not understand.
its easier to pick the "businesses" that would not do well - ACORN, abortion factories, anything minority owned, unions, etc.
the fall election is all about obama, pelosi, reid and frankendodd.
The purpose of a system is what it does. Both the Republicons AND Decepticrats have done nothing but SPEND FRN's and increased the size of the Leviathan Federal Govt., therefore, BOTH parties are just different sides of the same coin! I did NOT vote for Obamatron or McCain in 2008. Those that did are part of the problem.
"An election is coming. Universal peace is declared and the foxes have a sincere interest in prolonging the lives of the poultry."
T. S. Eliot
i see you're one of those tea-parroters.
LOL george soros 101
what happened to the old TP slurs
sir, 1.3% of the politicians on the offer in november have your interests in mind.
TERROR ALERT FUSCHIA!!!!!!!!!!!
boehner, cantor, bachus, shelby...
genius on the march.
@NOTW777: If I want to listen to parrots, I'll go to my local zoo. Stating the talking points of the establishment (either on the Dem or Repub side) is neither constructive nor additive to the dialogue here.
ok, go talk to zoo animals and birds; life is changing and with all due respect I'll talk about whatever I want
Dude, that is some grade-A trolling.
Filled with multiple layers of bile and diamond-like horseshit, and completely devoid of content.
Three cheers and a round for NOTW777!
Hm....NOTW777....Excuse me are you retarded?
spoken like a perfect liberal. respond with name calling as you get run over by the truth. you did come out to the light first
WTF are you talking about NOTW777 ? I'm no liberal which makes me wonder a bit in terms of your own affiliation, because if your representing the Republican party then I see your behavior as borderline retardation.
Accusations without the facts is a sign of retardation. This is why I asked if you were retarded, after all the only dumb question is the one you don't ask.
Here's a quote for you....
"There is a principle which is a bar against all information, which is proof against all arguments and which cannot fail to keep a man in everlasting ignorance-that principle is contempt prior to investigation."
Hm....NOTW777....Excuse me are you retarded?
LOL another bug comes to the light.
What is an "Abortion Factory?"
FYI - I advocate use of a coat hanger in the back alley so if all goes right, or even if something goes wrong, the dumpster is right there, but I'm sure you already knew that.
One of the gems in this piece is the end of *some* subsidies. Najarian was making this point the other night.
I wouldn't expect anything to happen on ethanol because those are red farm states and, moronic idea or not, what we're going to get is corn and soy ethanol. Similarly, no movement to drop the tarriffs on Brazilian cane ethanol. Solar, though, is screwed blue and tattooed under an elephant congress.
It would make more sense if someone were to talk about jobs, but the issue they seem to be running on is deficits and spending. Even if only gridlock manages to inhibit spending, dollar goes higher, PMs go lower.
StimPack 2.0 could never pass now. I think that StimPack 1 was a non-stealthy bailout to the states, pure and simple. This means higher UE from state employment cutbacks.
I sincerely hope they cut off the FIRE subsidies - abort AIG, put Frannie into runoff - but after all, we're talking about The Banker Party vs. The Other Banker Party, so that won't happen. But you probably won't see any more home price supports. There's another 20% off home prices.
If you really believe a resurgent Republican Party which is not veto-proof will succeed in rolling back the Obama agenda, then you haven't studied history.
Obama will use the next two years to implement even more far reaching controls via all the methods he has that are not legislative. He will also rally the left as he declares he actually needs more power consolidated in his hands, because the "politics" are keeping America from achieving his objectives.
He will be more dangerous than ever.
And if you believe Republicans have learned their lessons in two short years, then you are a danger as well.
Most Republicans just want their power back, but they are not planning on giving that power to you. It's why they are fighting so hard against the Tea Party candidates. For each Tea Party Candidate elected, the Republican Power Structure weakens.
It should be clear to the Rinos that many of us don't fit well in either party.The Dem party has been hijacked and is being held hostage. I happened to be in St Louis last weekend where they had a well attended enthusiastic rally of 14K people.
A little gridlock might be worth a try here.
Cruel,
Amen Bro............
What we need is a SOLID GRIDLOCK.
Our Gvt operates best, when it cannot operate at all.
Shut them down.Enough damage has been done already, we need to ALTO this bitch now.
I am so sick of all these D.C. mofos I could puke.
Don't get too excited, the Repubs may dominate the house and have a slim majority in the Senate but they will not be able to override the Obama Veto pen and we will have two years of stasis and possible govt shutdowns.
Further there is no budget for 2011 and continuing resolutions will let the Obama appointees keep doing whatever they want. Unless the President suddenly becomes a moderate, there will be little hope of change before the next presidential election.
"the Repubs may dominate the house and have a slim majority in the Senate but they will not be able to override the Obama Veto pen and we will have two years of stasis and possible govt shutdowns."
I'm not seeing any downside here.
No potential downside?
Hmmm! Consider this probable scenario, courtesy of Economics of Contempt, who knows a thing or two about finance:
http://economicsofcontempt.blogspot.com/2010/09/scary-thought.html
OMG...they won't be able to give away what is not theirs to give?
The horror of it all.
"Unless the President suddenly becomes a moderate"
uh, mr. oblahma is just another imperial manager.
NIXON/CARTER '12 -- Balls and Ideas for America!
Are you kidding me? There isn't hardly any difference between the two parties any more. Both parties are committed to spending 50% of the world's defense budget. Both are committed to bailing out Wall St and keeping everything secret. The repubs didn't do much for oil when Bush was in there. The next move for oil is down anyway. And House Repub leader Boner is calling for a $700 Billion deficit. Is this what passes for austerity nowadays? Fugetaboutit.
.
.
Anyone catch C ROVE on TV last night..what a sight, like kicking a cobra..his hate and venom for a Tea Party win in Delaware..should be a teaching point for strong R's and D's and leftist -he was one you..he hates the little people getting by the machine man.
Castle often showed up at dem functions as one of the boys in power who has kept the
socialists in power.
Makes one less inclined to think in terms of R or D..it's one elite bunch that only are resident ZH progressives don't seem to get.
As one of the ZH Progressives, what the hell are you talking about? As has been pointed out hundreds of times, the end policies of the 2 parties are now very much the same: privatize the profits and socialize the losses. This is hardly Socialism.
Yep big energy may be a winner if Republicans take everything in November, while small business gets the living shit kicked out of them.
Both of the Obama care mandates to repeal a tax provision of the health care reform package failed. Most on ZH are probably unaware that this is even happening.
The looting from the 2 headed Hydra continue....
http://www.courthousenews.com/2010/09/14/30338.htm
But 2 Amendments Fail By AVERY FELLOWShareThis
WASHINGTON (CN) - The Senate on Tuesday failed to advance two amendments to the small business bill that would soften or repeal a tax provision of the health care reform package. The amendments came from both sides of the aisle.
The amendments sought to change a mandate in the health care reform bill requiring businesses to report any transaction over $600 to the IRS.
This mandate, known as the 1099 provision, was expected to raise $17 billion to help fund health care for uninsured Americans, but received criticism for its potential cost to small business.
An amendment sponsored by Sen. Mike Johanns, R-Neb., sought to repeal the tax provision in its entirety.
On the Senate floor Tuesday, Johanns called the 1099 provision a requirement that "no business in America supports" and complained that President Obama was "demanding absolute loyalty to the health care bill."
Sen. John Thune, R-S.D., called it a "ridiculous requirement" that would "drown small business owners in paperwork."
Democrats countered with an amendment proposed by Sen. Bill Nelson, D-Fla., that would leave the 1099 provision in place, but would exempt businesses with 25 or fewer employees from the requirement and would raise the transaction amount to $5,000. The Nelson amendment proposed to make up the lost revenue by eliminating a tax break for oil and gas companies.
The Senate voted 46-52 in favor of advancing the Johanns amendment, 14 votes short of the 60 votes needed to move forward. The Senate also shot down the Nelson amendment in a 56-42 vote.
The double short Treasury ETF (TBT) will have to be a core holding in any long term portfolio.
Whether Treasury prices end up getting hammered or not you'd be a fool to hold a levered (and short here) ETF long term in your portfolio. The math involved in re-balancing the holdings of such a vehicle work against long term price appreciation. Just look at any long-term chart of any levered ETF vs. the underlying index it's supposed to track.
Please don't take this advice.
Come on MHFT. This is sloppy and stupid.
What happened to your funny bone? I laughed all the way thru the article. The point to me was that politics is more fun than a hurricane in a trailer park. More dividing of the populace into factions than real governance. Hyperbole is very effective. It's working!
If the article had been "anti-Democrat" it would have gotten 5 stars from this humorless group.
Honestly, I can't tell what's supposed to be tongue-in-cheek here and what isn't but it's lame no matter what. Marla he ain't.
Besides, as the Delaware GOP showed last night, if you don't act like you're Democrat-lite, the Republican Party won't support you, even if you win their primary.