David Evanson and Oliver Pursche
Minyanville.com, Fall, 2012
I’ve thought for quite some time that Obama will win the 2012 presidential election. I still do. However when I see that the Democratic Donors motif is more popular than the Republican Donors motif – which is measured by inquiry data – it gives me a little more comfort in my convictions.
I’ve written a few times about so-called investment motifs, which are baskets of stocks wrapped around an idea – like bulletproof balance sheets or junk foods – where investors can change the composition of the stock and sector weightings based on their own ideas and knowledge.
My belief is that because motifs are an inherently retail-facing investment, the relative popularity of one idea over another is an indicator of the nation’s state of mind. Therefore, when I see that retail investors are more curious about a basket of stocks comprised of Democratic donors than a basket of stocks comprised of Republican donors, I think it’s saying something that’s important.
Interestingly, when you examine the stocks in each motif, it looks like the country’s cultural divide on display. The Democratic donors consist of Hollywood cabal Time Warner (NYSE:TWC), DreamWorks Animation (NASDAQ:DWA), and Walt Disney (NYSE:DIS). An equally powerful — and diametrically opposed — trio on the Republican donor hot-list is Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM), and The Blackstone Group (NYSE:BX).
On the technology side, there’s Democratic donor “Don’t be evil” Google (GOOG) paired off against Republican donor Lockheed Martin (NYSE:LMT), maker of the HELLFIRE II missile system, a lethal, multi-platform weapon that looks like it was invented by Darth Vader.
I also think that the lower popularity of the Repeal Obamacare motif, versus the Senior Care motif – which would be hurt by Obamacare – suggests that despite the rumblings in Congress to repeal or otherwise materially revise the Patient Protection and Affordable Care Act of 2010, the effort will be met with a passive electorate, and will ultimately go into effect. Some of the companies in the Repeal Obamacare motif include Becton Dickinson (NYSE:BDX), Boston Scientific (NYSE:BSX), Quest Diagnostics and Laboratory Corporation of America (NYSE:DGX) and Laboratory Corp. of America Holdings (NYSE:LH).
Interestingly the Income Inequality motif – consisting of luxury goods makers like Tiffany (NYSE:TIF) as well as bargain-basement discounters like Dollar General (NYSE:DG) – is one of the most popular motifs. This motif, by the way is up 23.5% over the past 12 months. It seems that whether you are a 99-percenter or a one-percenter, there’s common ground in the idea that making money is a good thing.
PS: I may be altogether anticlimactic to mention this, but no matter who wins the election, I feel that the Republican Donors motif will likely beat the Democratic Donors motif over the next 12 months.