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How To Profit From Whoever Becomes President
This post might be a little controversial... Time will tell how it all turns out!
I think, by looking at a powerful person's own special interests, you can probably predict how that person will try to influence companies and markets...
That suggests by looking at John McCain's and Barack Obama's own special interests, we might be able to get a "peek" at how either person might influence markets and companies as part of his presidency...
Here's what we could have done regarding the Bush presidency. (Of course, it's all easier with the benefit of hindsight!)
Dick Cheney is former CEO of Halliburton. But, even more importantly, Cheney owns millions of dollars worth of stock options in Halliburton.
On this page, you can see a chart on the amazing rise in the worth of Dick Cheney's stock options. (He sold some of them and gave the money to charity, but I understand he still holds millions of dollars worth of Halliburton stock options.)
Halliburton's share price has increased around five-fold since the Iraq war started. Here you can see a chart of Halliburton's (HAL) stock price.
Knowing what we know now, we could have predicted that - since it's in Cheney's interests for Halliburton to make a lot of money (because of his stock options), he would, possibly subconsciously, use his powerful influence to make sure they make a lot of money. Which, you could argue, is what happened - with the war and with the government no-bid contracts for Halliburton, and for their former subsidiary, KBR, to supply war-support services.
Regarding George W. Bush, himself and his family have in the past had strong ties to the oil industry. Of course, the oil companies are the ones currently reaping huge profits from the sky-high oil prices. Perhaps there is a connection there as well (though I haven't looked into this one too deeply yet).
Anyone who had invested in oil companies at the beginning of the Bush presidency would have made a huge profit from those as well. For example, the stock price of Exxon Mobil Corp (XOM) has about tripled since the start of the Bush presidency.
Now, how can we use any knowledge we have regarding the incoming president to look at what might increase in value?
If John McCain wins the election, the main company to look at is Hensley & Co. John McCain's wife, their children, and John's son from his earlier marriage, Andrew McCain, together own 68% of Hensley & Co.
I predict that, possibly subconsciously, John McCain will try to influence government to work for the benefit of Hensley & Co. - because that will ultimately be to his own benefit, and the benefit of his family.
Unfortunately for us, Hensley & Co. is a privately held company, so we can't buy shares in it. If you could, that's probably what I would look at doing, if John McCain gets elected.
However, Hensley & Co. is an exclusive distributor for Anheuser-Busch, the makers of Budweiser beer. Anheuser-Busch is a publically listed company - you can buy shares in it. So, it's possible that what benefits Hensley & Co. might also benefit Anheuser-Busch. So buying shares in Anheuser-Busch might be a way you could benefit as well.
How about Obama? His corporate interests are a bit harder to figure out...
The closest I can come up with so far is that the finance industry seems to have a lot of support for him... I suspect it may be because they believe they will benefit from an Obama presidency. More about that here - http://www.npr.org/templates/story/s...oryId=92337754 .
So - and this is very speculative - you might be able to benefit from an Obama presidency by investing in finance stocks.
This whole approach might sound very cynical to some people - but I try to be a realist... I believe that the drive towards self-interest is a very powerful force. I think you can bet on it happening more often than bet against it... So why not look deeper into it, and profit from it? Even if you disagree, I think it's good "food for thought"!
Please note that none of this is financial or investing advice. I am not a finance professional, and for financial advice, please seek a professional.
Last edited by Dien Rice : July 14, 2008 at 12:58 AM. Reason: tried to make it clearer
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