Jim Cramer, in a piece for NY Magazine, explains which industries, companies, and sectors will gain and lose this November from either a Republican or Democratic victory.
- Short Oil: ExxonMobil (XOM), Chevron (CVX), Schlumberger (SLB), and Transocean(RIG).
- Long Solar & Wind: First Solar (FSLR) and Broadwind(BWEN.OB).
- Short HMOs: WellPoint (WLP), Humana (HGSI), and UnitedHealth (UNH).
- Long Home-Builders: Toll Brothers (TOL) and Ryland Group (RYL).
- Long Nuclear Power: Shaw Group (SGR)
- Long defence: General Dynamics (GD) and Lockheed Martin (LMT)
Cramer begins with energy and points out that an Obama victory is probably a defeat for big oil:
While Barack Obama was less outspoken on the issue than his erstwhile opponent, he’s no friend of oil and gas, and he will seek to tax what he perceives to be Big Oil’s ill-gotten gains. I hate to tell anyone to sell these stocks, as no president can stop oil’s seemingly inexorable rise, but because of all the negative rhetoric, you’d have to trim both the major oils, like ExxonMobil and Chevron, and the big drillers, like Schlumberger and Transocean, under Obama.
Alternative energy, meanwhile, would fare well under an Obama adminstration:
An Obama victory would also be good for solar and wind power. My No. 1 solar pick would be First Solar, the only company in the field with a product that’s commercially viable… In wind, there’s only one pure play right now, Broadwind, which I think could double over the next eighteen months on a surge in orders under a Democrat.
If John McCain were to triumph,however, nuclear power would be a safe bet:
My energy pick in a McCain presidency is nuclear power. McCain genuinely believes that he has a shot at jump-starting the nuclear industry, a technology that almost every country on earth recognises as the best way to cut carbon use but that we have all but shunned since Three Mile Island.
If you’re betting on an Obama victory, then shorting health-maintenance organisations, a group that President Obama would elbow out of the way on his path to socialized, or semi-socialized medecine, might be a safe bet:
The health-maintenance organisations have also been knocked down ahead of the election because of price competition. They’ll get the 10-count under Obama, who views them as a major obstacle to better, cheaper health care.
Another safe bet under President Obama would be home-builders. Unlike Senator McCain, who prefers a more laissez-faire approach, Senator Obama is in favour of a large bailout for the housing market:
Obama would get behind massive federal relief for stressed-out homeowners struggling over higher mortgage rates and lower home values. To date, McCain and the rest of the Republicans have favoured a laissez-faire approach to the issue. That sort of hands-off policy is traditionally good for banks and home-builders, but in this case it has led to bloated inventories from foreclosures and unsold new and old homes. Obama would side with the congressional Democrats, who would offer hundreds of billions of dollars in mortgage-loan guarantees, something that would actually end this nightmare.
Finally, if you’re betting on President McCain, there is one obvious play: defence. The Vietnam war hero and outspoken proponent of the War in Iraq has made it very clear that he sees a strong military as crucial to American foreign policy and has repeatedly called for an enlargment of the Army and Marine Corps:
If you want to know where the easiest money will be made in an election, it will be defence. Presidents have a great ability to direct spending toward certain branches of defence, and we’ve got McCain’s Navy coming our way if he wins. Both General Dynamics and Lockheed Martin have the most to gain.