All those Dem partisans out there - well done. Not as close as polling said, really very impressive effort with turnout to create a D+6 electorate.So now maybe we can get back to investing (mostly).The election mostly maintained the status quo - some Dem gains, but not enough to change anything fundamentally. So there are still major, existential problems facing the US, and no clear solutions proposed and achieving public backing. Say what you want about Romney Ryan, but the fiscal plan proposed by Ryan in Congress, and largely adopted by the campaign at least addressed the debt problem. You may not like the solutions (I certainly thought they could be improved), but it was a serious attempt to address the problem. The problem hasn't gone away, and there is now clearly no agreed upon solution.I'm not sure people entirely grasp that these problems are, quite literally, existential. The debt crisis is severe enough that, if there are no course changes, at some undetermined but quite close future point, the US will cease to exist as a single nation. And tax increases won't solve it, particularly if they are limited to the top few percent of income recipients, and especially with the economy still only slightly better than moribund. Perhaps a broad based middle class income tax increase along with a 10 - 15% VAT might get enough revenue to somewhat limit the spending cuts required, but we still need to reform entitlements and cut some programs. Plus, such a tax program would devastate the economy. It's not personal - it's just math.After the election, President Obama and the Dem Party pretty much own these problems. We know the solutions they propose will include new taxes. What else is in the plan? And, more to the point, to get back to my investment theme, how do we make money off the coming policies?In the new US paradigm of significant tax increases, aggressive implementation of the PPACA, and increased regulation and government involvement in a number of industries, how do we invest to get positive returns?My thoughts, for what it is worth:1. Energy sector. Probably the easiest sector to make some accurate guesses at. President Obama has never been particularly enthusiastic about fossil fuels, and clearly would like to pass carbon tax and/or cap and trade legislation. I'd be surprised if the Dem Party did not make a pass at this concept. So perhaps we can consider shorting coal producers, and going long on some renewable energy ("Green") Companies that seem likely to get propped up by Fed $$. Other companies that would be decimated by a carbon tax would include trucking Cos, and cement producers. Then there is the "tight rock" energy revolution. I suspect they'll face a raft of new regulation. Will it be enough to slow down fracking and production? Maybe. Prices already seem to be falling. Simultaneously falling prices and production? Perhaps it may be worth taking a look at shorting producers in tight oil plays.2. Medical and health care insurance sector. It is clear that the PPACA will go ahead full steam. It is also clear that provisions in this law will devastate certain companies. In particular, the guaranteed issue and minimum payout ratios will make insurance impossible to make a profit on unless you are really, really large. Mid tier insurance cos will stop selling health care insurance or go bankrupt. In either case, they are likely targets for shorting. Once some of this competition is worked out of the system, the large cap insurers (Cigna, Aetna, Wellpoint, United HC) will increase market share, may get some pricing power and be worth investing in.3. Dividend cos. With the desire to eliminate consideration of dividends at a 15% rate, and increase the rate to normal income (desired 43.5% rate), companies issuing dividends will be destroyed - particularly BDCs and many other large payors. Nevertheless, it is hard to consider shorting them because of all the cash you need to come up with to pay the dividends while you're waiting for the Company to die. Not sure if this is worth pursuing.4. Retailers. If a VAT is proposed, retailers will be pounded, particularly those specialising in discretionary items.5. GM. I've already made a bunch shorting GM. But there is more there while US Gov still has 26% of the Company.Any other thoughts?Brian
Nate Silver absolutely hammered it out of the park! He can write his own ticket this morning. (Maybe we can entice him to start predicting stocks!)
Nice post, Brian!
<cricket chirps> Hello? Hello? Is this thing on? </cricket chirps>
Probably in hiding ... except for Tinker, who is probably out boat shopping, although I wish he wouldn't.
My watch list is all red except for BKE meaning Mr. Market did not like the result of the election. As an investor my issue is not if I like it or not but how do I profit from it or how do I protect myself from it.There is good debt, bad debt, tide-over debt and toxic debt.Good debt is when the debt produces more than the cost of the money, for example when you finance a productive facility or a when you finance the purchase of a home with a reasonable mortgage.Bad debt is when borrow to pay for things you can't afford.Tide-over debt is for resolving emergencies.Toxic debt is when you cannot service the debt, when interest payment becomes excessive for your income level. When this happens you end up bankrupt or in the poorhouse, happens to people, companies and nations alike. I believe the market is worried about dear Uncle Sam's debt turning toxic. The good news is that the loyal opposition maintained control of the House. Hopefully they can prevent the debt from going toxic.1. Energy sector. In principle America is on the brink of becoming energy independent provided green policies don't kill the goose that lays the energy eggs. Energy independence means additional supply and lower prices. Oil companies rise and fall with oil prices. In principle you don't want oil majors at this point. But the green policies bode well for the green providers to the energy industry. For example, if OriginOil can make a go of cleaning up frack-water, it would be a sweet investment. Another energy sector might be NG based fuels including fuel suppliers (CLNE) and equipment providers (WPRT) but I would go slow to see if we go over the cliff or not.2. Medical and health care insurance sector. The medical sector likely will get squeezed. Insurers, if they are "properly" regulated (like MaBell was), will make a lot of money.3. Dividend cos. Wait for the tax rate outcome. If you think they will go up you might want to dump you divi stocks.4. Retailers. VAT gets passed on to customers. Only consumers pay taxes because all taxes are passed onto them as Cost of Good Sold. Retail is likely one of the safer bets provided you invest in the right retailer: those who cater to the low end (WMT, ROST) and the cost conscious (COST) and those who cater to those who can continue to spend on discretionary items (LULU). 5. GM. I don't short.6. Foreign markets It might be time to look at foreign diversification (ARMH, KNDI).Denny Schlesinger
The election mostly maintained the status quo - some Dem gains, but not enough to change anything fundamentally. We want to work with the GOOD Republicans. We want taxes hiked on the rich. We want to cut taxes more on the middle classes....the working classes....if the Republicans work with us on those things we wont oust them fully in 2014.....if not say good bye to the house in 2014......Dave
4. Retailers. VAT gets passed on to customers. This is an EU problem we dont want to import. It is a manufacturing tax not a retail tax as it is billed as being.Each manufacturing process or step is taxed......this is why the Europeans are doing so poorly in large part. And the restructuring once it is in place and has to be ripped out is like a root canal. Dave
glad to see you are still here Denny.
glad to see you are still here Denny. Curious, why shouldn't I be????Denny Schlesinger
You should be.
^what Tamhas said.
i fear it may be some time before we see Duma and Tinker. I do hope they will stick around too.
Denny,Nice to see you around, I just wanted to remind you about something you said once and it stuck with me.Paraphrasing..For a president to be considered successful they have to be elected twice, not once.There you go my man. Now, let's work together. Love is better than hate and positive is better than negative.. My watch list is all red except for BKE meaning Mr. Market did not like the result of the election. As an investor my issue is not if I like it or not but how do I profit from it or how do I protect myself from it.I knew you were going to say that, come on man, you know better. Market has doubled under our President since 2009. DOUBLED! a dart throwing monkey would have made money under this administration. One down day and you are harping on...oh well.Say it with me, Four more years. President Obama. Tea party is nothing more than a vocal minority anymore. If they don't change 2016 will be even worse, if you can even imagine that far.Tony
Tony:The United States of America almost didn't happen in the acrimonious Constitutional Convention. The question is: Did they solve their problems through concessions or through bargaining? I believe it was the latter.Say it with me, Four more years. President Obama. Tea party is nothing more than a vocal minority anymore. If they don't change 2016 will be even worse, if you can even imagine that far. I find that highly disrespectful. Funny thing is that America, specially on the left, tries to be politically correct in many trifles yet it loves to offend political opponents. In this regard, you might learn something from the English (and Canadians too) who call the losing parties "the loyal opposition".While I acknowledge Obama's victory I will not "Congratulate the Dems," nor like Obama nor his policies any better than I did earlier. As I said in my earlier post:The good news is that the loyal opposition maintained control of the House. Hopefully they can prevent the debt from going toxic.The Founding Fathers were very smart and they instituted checks and balances for good reason. The government and the loyal opposition will have to bargain until a solution is found without the need for consensus.Denny Schlesinger
Hi Brian,Care to explain how these two statements can coincide in any rational way?The election mostly maintained the status quo ....After the election, President Obama and the Dem Party pretty much own these problems. So nothing has changed and yet now it's the President & Dems who own the problem all of a sudden?I'm sorry but you appear to think of yourself as some variation of moderate and/or non-partisan and yet your words leave me somewhat skeptical.This sounds suspiciously to me like any number of conservatives who sat silently as Dick Cheney proclaimed "deficits don't matter" only to suddenly get religion when there was a Democrat in charge.This sounds suspiciously to me like any number of conservatives who's only view of reasonable compromise/bi-partisanship is for the President to adopt their positions entirely even after winning what is now two elections.I agree with you that we face an existential crisis if we don't find a way to work together but there are no magic bullets and for the Republicans to pass some plan that they knew was DOA when they passed it is even more disingenuous than what the Presidents plan of raising taxes on the 2% along with some cuts in spending would be if he claimed that in itself would solve the problem. The difference IMO is the Presidents plan would make a small dent and it would send a message to the world that we still have the capacity to work together i.e, govern in this country.The idea that raising taxes will somehow cause investors to go Galt is simple hogwash IMO and your post provides me with evidence to back my position up. Even after the election results didn't go your way (I assume) what is your first reaction? To leave? Nope it's how can I go forward in this new reality and make a buck anyway.It's the American way. :<)B
So now maybe we can get back to investing (mostly).Don't worry about building wealth people......worry about preserving it!This could get real ugly.American exceptionalism is dead.
I find that highly disrespectful. Funny thing is that America, specially on the left, tries to be politically correct in many trifles yet it loves to offend political opponents. In this regard, you might learn something from the English (and Canadians too) who call the losing parties "the loyal opposition".Facts are stubborn, you know what. Demographics are changing and GOP needs to recognize that. I believe they will. Everyone deserves respect and voice, I believe voter intimidation was part of GOP's plan. Didn't work, it actually ticked folks off and they stood in lines for hours and hours to get their voice heard. Point is, play it fair and by the rules, let everyone have a voice not just one party or one race. Go ahead stick your head in the sand , I promise you it will get worse for you guys come 2016 if things don't change. Offensive or not, yelling and screaming only gets you so far. Wake up!I'm not a die hard Democrat, honestly I'm not. I want to have a real choice, not just some baffoon running around making things up. I'm baffled and actually scared by some tactics GOP uses. I honestly am and I'm not alone. In 1988 Bush Sr got 60% of white vote and that was enough to get him over 400 EVs. Last night Romney got about the same, and he just got clobbered, wasn't even close. What does that tell you?
Denny, You should read this, I believe Friedman is a Republican. Very Well stated!http://www.nytimes.com/2012/11/07/opinion/friedman-hope-and-...
<<glad to see you are still here Denny. >>Curious, why shouldn't I be????Denny Schlesinger I'll take a shot at it.I too am glad you are still here... the political rhetoric got pretty negative at times.So much so that it appears Tinker has taken a break from the board. That's sad... but not unexpected. He's pretty immature and amazingly sensitive for someone who is supposed to be a lawyer.You, Denny come across as a man who can 'give as good as he gets'...AND you seem to be able to NOT be too easily offended.Be that as it may... we will have to wait and see if this board survives from this point on. Peace and good trading everyoneralph
Facts are stubborn, you know what. Demographics are changing and GOP needs to recognize that. GOP needs to do what they feel they need to do, not what you think they need to do, unless you are a part of the GOP. If not, worry about what you need to do.Offensive or not, yelling and screaming only gets you so far. Wake up! Who's yelling now?I'm baffled and actually scared by some tactics GOP uses. I honestly am and I'm not alone. I'm baffled and actually scared by some tactics the Democrats use. I honestly am and I'm not alone. LOLIn 1988 Bush Sr got 60% of white vote and that was enough to get him over 400 EVs. Last night Romney got about the same, and he just got clobbered, wasn't even close. What does that tell you? That this conversation is not going in any useful direction. Some people complain about politics at the NPI and can post about nothing else.Got to hurry along, MAKO is reporting! Tomorrow MCP.
Denny, You should read this, I believe Friedman is a Republican. I'm not interested in what the GOP should do. Why the fixation on the GOP?Denny Schlesinger
I have to agree that there is no need to tell the GOP what to do unless one is part of the GOP. I see no reason to try to get them to behave in ways that won't lose them votes.
I have to agree that there is no need to tell the GOP what to do unless one is part of the GOP. I see no reason to try to get them to behave in ways that won't lose them votes. LOL! What can I say, I care way too much. It will no fun having a one and half party system, would it?
The ultimate example of a hypocrite.GOP needs to do what they feel they need to do, not what you think they need to do, unless you are a part of the GOP. If not, worry about what you need to do.Almost sounds reasonable until this.I'm baffled and actually scared by some tactics the Democrats use. I honestly am and I'm not alone. I've said it before and I'll say it again.Mind your own frigging business, it's not your country it is ours.Contemptibly yours,B
You, Denny come across as a man who can 'give as good as he gets'...AND you seem to be able to NOT be too easily offended. ralph It was a rhetorical question, but thanks, I work hard at it. It ain't easy! LOLI have a credo:1.- Politics is too important to leave to politicians2.- Don't get mad, get even3.- Don't compromise, bargain4.- Mind your own (my own) business5.- It costs nothing to be politePeople have hard held political beliefs, I know I do. I know that as I matured (aged?) and as I got to know the world better my views have changed. I have never belonged to a political party but my voting has been consistent. I love political discussion but NOT party politics, specially not name calling. What I specially dislike is people telling me what I should do or how I should think. I believe this piece I wrote during the 2008 election will illustrate my position:September 15, 2008 Let Me Tell You Something! http://softwaretimes.com/files/let%20me%20tell%20you%20somet...If we could keep the political conversation at the NPI at an adult to adult level, it would work fine.Denny Schlesinger
More likely a one and two halves ...
If we could keep the political conversation at the NPI at an adult to adult level, it would work fine.If we could keep it to an adult level, it would certainly be more enjoyable, but I still think it would be better off on a forum to the purpose, since even if it had been polite the volume would have drowned out the genuine NPI. Of course, if it was polite and reasoned, then it would also consist of less chanting, ranting, and pure opinion pieces that contribute nothing to our understanding, so the volume would have been a lot less.Now, who knows.
The thread is interesting. Where it flows to etc.....The GOP lost the race for the white house because of its rank and file members. Not the number of them, this has nothing to do with the majority or minority. It has to do with the quality of what they have to say firstly on the economic front, and then secondly on the social front. Could it be that many poorer folks know a lot more about what this country needs than a few rich smug folks? If you answer that question honestly, the answer is yes. Many working class uneducated whites have been led to believe that supply side econ is it....the only answer. We have two different indoctrinations in this world, supply side econ and demand side econ. Generally the older white male and many women know only the supply side part of the equation. They have often some wherewithal hence what they know is right. It is there way or the highway. Poorer people just dont know or have bad characters. And that for the rest of us goes straight back to the slave trade in this hemisphere. Poor Africans with no say, who da thunk it? Obama is not an American citizen or he is a Muslim. He aint one of us. Well he is one of us and he is doing a massive job for us and our future. Not only is he doing it for us, but the person the GOP put up was doing it against us. And not just the poor amongst us, I mean doing against all of us. Supply side wont be back for another thirty years.As I say to my conservative friends, and I do have many of them, when you are a liberal I will be going back to being a conservative. This leaves them very baffled. I need to be alive thirty years or so from now to keep that promise, but it is true. There is a time and a place for everything. Two of my conservative friends have lost bets with me. One my barber bet me an $18 hair cut. Thanks Nick. And the other a restaurant owner in the north west corner bet me one hundred to one that Obama would not get reelected. Thanks for the $100 Joe. C both of ya soon......Dave
And the other a restaurant owner in the north west corner bet me one hundred to one that Obama would not get reelected. Thanks for the $100 Joe.LOL, I don't know who is is the bigger fool.Joe for giving you 100 to 1 odds, or you for only betting a buck. :<)B
B,I am only so greedy.....Joe is a decent guy......If the nor'easter had hit a little later or earlier I'd have collected by now......will try to collect tonight......he is good for it......DavePS did Tink really swear off posting? or is he somewhere in the shadows??? LOL
Democratic Demographics Faced Significantly Longer Voting LinesAFL-CIO did a study election night about the time spent waiting in line to vote. The results showed significantly longer wait times for those demographics likely to favor Democrats. % of people who waited over 30 minutes:16% Obama voters 9% Romney voters 9% Whites22% African American24% HispanicsSure looks like voter suppression attempts to me.http://2012.talkingpointsmemo.com/2012/11/poll-democratic-de...
Sure looks like voter suppression attempts to me.Which helps to explain why we stayed in line. Some of us twice. :<)It didn't hurt that I like firing people who like firing people, or like telling billionaires to go suck eggs.B
Quiet on this board. Too quiet. Let's see if we can stir it up.I saw this post:>> Democratic Demographics Faced Significantly Longer Voting LinesAFL-CIO did a study election night about the time spent waiting in line to vote. The results showed significantly longer wait times for those demographics likely to favor Democrats. % of people who waited over 30 minutes:16% Obama voters 9% Romney voters 9% Whites22% African American24% HispanicsSure looks like voter suppression attempts to me.<<I thought, hmmm... seems a strange thesis. But I looked into it a little, with the help of the inimitable Sean Trende (I love the precision in the table on page 2!):http://www.realclearpolitics.com/articles/2012/11/08/the_cas...So it seems like you were right, Tamhas. Voter turnout among those who might be considered proportionally R-R voters was down almost 7 MM, resulting in lower overall electorate turnout than 2008. As Mr. Trende notes, this is not because raw numbers are declining. If R-R had matched Senator McCain's turnout in 2008, they would have had a good shot at FL & VA; if they had matched President Bush's turnout in 2004, they arguably would have won overall in a really tight race; if they had matched President Bush's turnout with proportional increases for population growth in their electorate since 2004, they would have won walking away.Why did so much of the electorate not show up on Election Day? The poli sci types will be busy on this question for a while, but it seems the leading thesis is actually that President Obama's campaign cleverly combined intensive data mining, targeted messaging, and negative advertising to cause this. Specifically, they seemed to find a lot of voters, predominantly white working class voters who - in another age - were called "Reagan Democrats", who were supporters of President Obama's in 2008, but could not support him in 2012, and targeted them with messages that convinced them that Governor Romney was not a suitable candidate to vote for. Thus, they stayed home. Governor Romney's campaign also assisted this outcome with entirely inadequate get-out-the-vote efforts.This thesis, and the facts in Mr. Trende's article, also nicely agree with the data in the AFL-CIO study you reference.I will quibble with your use of the term "voter suppression", which is a bit of a loaded phrase. I'd just call it really clever and hard nosed politicking, getting your voters enthusiastic and to the polls, and ensuring your opponent's voters were not quite as enthusiastic.At any rate, an interesting lesson in electoral detail. Certainly an excellent job by the President's campaign. I'm sure the Republican mechanics are hard at work learning what they can. Elections in the future will be ever more data driven.Regards,Brian
Quiet on this board. Too quiet. Let's see if we can stir it up.Actually, I was thinking that it had been pleasantly on topic for a change and I'm sorry to see this stuff coming up here again. Not that some of it isn't potentially interesting; it just belongs somewhere else.Slice the data another way and a somewhat different picture emerges.http://fivethirtyeight.blogs.nytimes.com/2012/11/12/turnout-...The pattern, admittedly still a bit preliminary, is that voting was down in general ... perhaps not surprising considering the alienation which all the negative campaigning is likely to produce ... except that it remained at prior levels in most battleground states where the GOTV campaigns were focused. With these being more effective among growing minorities ... both because absolute numbers are growing and because some segments, notably Latino, have not had historically high voting rates, but this seems to be changing.However, I don't think that this shift begins to account for the long lines in non-white districts. Rather, the level of minority voting is a testimony to people determined to vote despite the long lines and other obstacles.
>> Quiet on this board. Too quiet. Let's see if we can stir it up.Actually, I was thinking that it had been pleasantly on topic for a change and I'm sorry to see this stuff coming up here again. Not that some of it isn't potentially interesting; it just belongs somewhere else. <<OK, fair enough. All politics onto another board.So, peripheral to politics, but focusing on investments, dividend payors have been getting beat up more than the market in general since beginning Nov. I am particularly interested in CODI. Business development company with a number of small to mid size firms it is working on growing. 3Q press release:http://codi.client.shareholder.com/releasedetail.cfm?Release...At $15 a few weeks ago, it was a bit rich for me, but is now falling to $13.5ish, which is kind of interesting (10.7% yield). However, if dividend income is treated as regular income in the new tax laws, then maybe it needs to go down a bit further before becoming a buy. I.e., if previously a $1.44/yr dividend was 9.6% gross at $15, or 8.2% net after 15% tax rate, then price needs to go to $10.6 with $1.44 annual dividend for a gross rate of 13.6% to get a net rate of 8.2% at a 39.6% marginal tax rate. On the other hand, President Obama has expressed support for corporate tax reform, including lowering the top rate from 35%. If that happens, suddenly the portfolio companies become more profitable, and can pass through more to dividends, so the dividend increases, before losing more in income taxes.Not really sure it is a new paradigm, but all these changes, if enacted, will mean new ways of thinking about all these companies, and there may be opportunity where the market throws out some good operators along with the bad ones.Which is a long way of asking - any opinion on CODI? Is there something there?Brian
OK, fair enough. All politics onto another board.What a pleasure! Thank you!But, I would have started a new thread for CODI ... on which I have no opinion.
But, I would have started a new thread for CODI ... on which I have no opinion.http://boards.fool.com/mini-berkshire-30018518.aspx?sort=who...
dumaflotchie Don't worry about building wealth people......worry about preserving it!This could get real ugly. Man how prophetic, the S&P sitting at 1615 vs the 1377 it was on 11/07/2012. A lousy 17% return when I might have spent less time worrying about building wealth vs preserving it.American exceptionalism is dead.Tell that to Mr. Market. :<)B
dumaflotchie Don't worry about building wealth people......worry about preserving it!Duma,This down turn for the last 13 years and counting is a supply side economics down turn. We only have RR to thank for our problems. But then again you voted for the old creep of a president.Dave
Thanks Dave, for pointing out a real area of conversation that is desperately needed in America, and that is a discussion of the absolute poison that RR injected into American politics.From the "southern strategy" (AKA god, guns, gays and brown people) to the supply side fantasies that continue to infect the Chamber of Commerce and the intellectually disabled (AKA Tea Party) the sickness persists to this day.Not to mention the 24/7 news cycle that to continues to perpetuate stupidity under the lazy pretense of "providing BOTH SIDES of the story".
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