Sunday, November 04, 2012

Election Thoughts Randomosity

  • $$ - There is an election Tuesday. Here are my thoughts.
  • Historically, the market performs better under Democratic Presidents, but it also does well under Republican Presidents.
  • Most likely, no matter the Presidential race outcome, there will be gridlock in Washington.
  • I think the biggest issues are Obamacare and the Fiscal Cliff. I suppose we could throw in the EPA. Both sides have different approaches to those things. But with gridlock, expect little more than the status quo.
  • The polls are all over the place, and all based on turnout of Democrats vs. Republicans, and giving some sort of weighting to the Independent vote.
  • Tonight, a D+11 poll has the race tied. No way the turn out is D+11, though. Going from memory, that was a 40% Democrat, 29% Republican and 30% Independent turn out. Nope. Won't be anywhere near that. I'm expecting the (D) and (R) numbers to be very close to each other, and the (I) vote to break for Romney close to double digits.
  • So, I think Romney wins.
  • But... Lets be honest. There has been a huge demographic change since the days of Reagan, in that more and more people depend on government programs and entitlements. It is getting tougher and tougher for the GOP to win national or state-wide elections. Romney was blasted for his 47% comment, but maybe that number is closer to 50% or greater. There are many folks who want and need a government that provides stuff for them. That favors the Democratic Party.
  • So would I be shocked if Obama wins? No. I just think it's unlikely due to Republican enthusiasm and Obama's track record for the last four years. 2008 was a combination of Bush fatigue and enthusiasm for Obama, in addition to a weak GOP candidate in McCain. Now the GOP has its strongest candidate since Ronald Reagan. Many people have Obama fatigue, and feel like he focussed too much on health care and not enough on the economy.
  • No matter who you support, life will go on.
  • If Obama wins, we may end up changing our investment strategy. Maybe we ditch dividend stocks and go back to tax efficient investing. Who wants to pay that new dividend tax rate plus the Obamacare tax on top?
  • If Romney wins, maybe we get out of stocks if the government really does cut back on stimulus.
  • Anyway... Futures were slightly positive when I checked.
  • The Redskins Indicator: Romney will win.

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