Preparing for An Obama Presidency

by Dual Income No Kids on July 19, 2008 · 0 comments

Hello All,

Unless you are Nostradamus, predicting the future can be a risky endeavor. So, its with some reservation that I’m making the following prediction: Barack Obama will be the next president of the United States. I’m saying this for a number of reasons, including polling numbers, lack of public enthusiasm for the GOP candidate, campaign management and fundraising levels – all of these point to victory for the Obama campaign.

Now, what precisely does this mean for your pocketbook? Again this is speculative, but here are three thoughts on the issue:

1) The Military, Energy & Conservation: Defining energy policy as a national security issues is currently an influential idea in the democratic party(1). This indicates the Obama campaign may define military use of oil as an important element of national security. This may ultimately mean that the DOD will focus on finding alternatives to petrochemicals and their derivatives. This suggests you might keep an eye out for defense companies that will benefit from grants and funding for these technologies. Electric tank anyone?

On a similar note – An Obama administration would likely implement tax policy to favor alternative energy technologies like: solar, wind, fuel cells, hybrid cars and fully electric cars (think: tax credits for the Tesla roadster)(1). In addition the high price of gas suggest that these alternative energy policies will remain politically popular, and will therefore be potential sources of business for the near future for companies positioned to profit from them.

2) Universal Health Care:
An Obama administration will have much more interest in comprehensive health care. than the current management. Accordingly you might consider researching companies that are making products for innovative health care management. For example, companies that focus on streamlining bureaucratic procedures for health management may do well under Obama.

3) Mortgage Regulation:
Obama’s economic plan calls for ensuring accountability in the subprime market, revamping loan disclosure agreements and closing bankruptcy loopholes for mortgage companies (1). This suggests that lenders and banks may find themselves in a more stringent regulatory environment. To be entirely fair, tougher regulation may happen anyways, but the Obama campaign’s platform makes calls for greater oversight explicit.

What does this mean for your bottom line? Mortgages companies may have to cope with greater regulation, so it implies that industries that rely heavily on mortgage lending will see their overhead costs increased.

Just to wrap this up, predicting the future isn’t easy. But if you’re a serious stock market investor, it might be worth your time to consider what could happen when the issue is decided on November 4th.

Best,

James

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