Well we are almost done with the election season, thank goodness. I will stick with what I said last week, my gut says Bush wins the popular vote and Kerry will win the electoral college. Of course it doesn’t really matter. Bush will bring more of the same, you can decide whether that is good or bad, and Kerry will bring a Clintonian gridlock to Washington and get nothing accomplished. At least not for the first two years anyway.
I believe I just coined a term, Clintonian.
Since 1972 there has only been one presidential election year where the market changed its trend in the first week of November, 1976. My point is that we may not see a post election rally with any teeth. Beside the historical evidence, it seems like too many people expect a rally. It has never been logical to me why the day after the election is a better day to buy stocks than the day of the election, and history would seem to agree. Great if it does rally; my clients will get to participate.
CNBC, on Friday, questioned whether we have seen the peak in oil and oil stocks and if a correction for both is coming. That could be the case. I have been overweight energy for a while now because I think there is huge growth in demand in China and India that will last for several years. So here I talking about long term demand. Some portion of the run up to $55 has been due to short term supply issues like hurricanes and labor unrest. The analyst community has been so wrong about the price of oil for so long that I have no reason to believe they are correct now when they say that oil will go back to the high $30’s. If we follow this thought further if the analysts will be wrong about the high $30’s that must mean it either goes lower than that or does not go that low. Because of the Chinese and Indian demand my vote is that it won’t go as low as the high $30’s. I have a stop order or two in place in case I am wrong.
There was an interesting article in Barron’s European Trader column about Gazprom, the giant Russian gas company. The take away is that the shares may be allowed to trade more freely in a way that may create more demand for Gazprom stock. Clearly owning Russian stock carries quite a bit of risk but that does not make the story any less compelling. I would not be surprised to see Gazprom lift on the article for a couple of days. After that it may be worth exploring further.
Lastly, a quick rant about Gregg Hymowitz showing on Cavuto today. I have disliked this guy ever since he first showed up on TV. Has anyone ever learned anything about investing from this guy? I have not. Back when he would actually talk about stocks he only talked about huge over owned American companies. As I have written before, I think that any manager that only touts these types of stock either is sharing none of their insight or they have no insight. Either way what’s the point? Now his political opinions are all he talks about. Kerry can do no wrong and Bush can do no right. I always thought successful portfolio management, regardless of method, required insightful analysis to multiple outcomes. Hymowitz talks as if he is utterly blinded. Again, if he has more insight that he won’t share, what is the point of having him on? Is Fox not able to find someone to articulate the left side in an insightful way? I actually don’t think Hymowitz is as dumb as he appears to be. I actually believe, based on what I see on FOX, he is not willing to share his firm’s insights into anything related to capital markets.