With the elections coming up tomorrow, the most important question you should ask yourself is… What do I do with my cash? Instead of worrying about the bad if Obama or Romney wins think about the opportunities that may present themselves given each candidate’s election and place a small bet on a particular stock, fund or portfolio for your 2013 game plan. Certainly don’t go all in on a single stock/fund… since politicians lies. Below are the basics to remember.
Obama. Health care and Bonds.
Romney. Banks and Taxes.
That’s the basics on how to divy up the two. The big value add here is going to find a niche play that you believe will out perform. Here are some good ideas to get started.
Obama Win.
- Muni Bonds:This is specific as the dividend tax increase which may occur would directly impact the bond market, however the “attractiveness” of the Muni market in particular should be spectacular. Triple Tax Free.The downside here of course is that you’re going to see… Your money invested in the good old USA and your specific state.
- Medical Properties Trust [MPW]: As previously mentioned in why you should not buy a home as an investment. This becomes an interesting play. It is a stock that focuses on owning… hospitals. In theory the Affordable Care Act should positively influence operating income and cash flow
- Stryker [SYK]: This is another interesting higher beta play as the company specializes in spine/replacement procedures. Typical health care costs that are expensive, heart attacks, stroke etc. Tend to occur later in life. If the health care reform moves in we would likely see an increase in replacement procedures as they would become more affordable for the general public (just think about all of those people with injured shoulders, knees, hips etc.)
Romney Win.
- Investment Banks [BAC, C, JEF etc.]. This should be laughable to most readers as it is incredibly obvious, given his history in Private equity and his stance to repeal the Dodd-Frank Bill. With that said lets look at more interesting plays.
- Cisco [CSCO]. Over numerous earnings calls the Company has reiterated that it wants to bring in foreign cash to the USA. Currently, it would be subject to a repatriation tax and this could be lifted given a Romney win, again softer tax policies.
- Reits Again. While REITs should always be owned as part of portfolio in our view (inflation protection), we believe this would be even more attractive in a Romney win as the softer scrutiny of banks could pump up home prices for round two of asset over valuation (or inflation). Either way these should get pumped.
What to Avoid?
- Defense. This one is difficult. Given that both parties Dems/Republicans have been terrible at maintaining a balanced budget, lets go ahead and guess what will happen to defense spending… who knows? This is a toss up, the Street is likely saying budget sequester exposed stocks will benefit from Romney. Lets be honest though, guessing what the government will do to defense spending is not a game you’ll want to be playing. So lets just ignore the sector until the budget gets flushed out.
Conclusion: For the fun of it, if a gun was pointed to our heads we’d assume Obama wins… Get some Muni exposure, should have a little bit at all times as it is anyway. Oh and finally, we sure hope you didn’t watch a single second of the debate unless of course you can influence the elections… in which case you should not care because you’re so rich… hmm fuck.
