For 2008, It’s a Bull Mar­ket

The Washington Post Sunday - - Outlook - By Daniel Gross

The hype and anal­y­sis sur­round­ing pres­i­den­tial can­di­dates’ quar­terly fundrais­ing re­ports al­ready ex­ceeds the level of scru­tiny ap­plied to IBM’s latest quar­terly earn­ings. And you can al­ready in­vest in can­di­dates through po­lit­i­cal bet­ting sites. So why not take the com­par­i­son to its log­i­cal con­clu­sion and start treat­ing the can­di­dates like ac­tual cor­po­ra­tions?

Here’s a handy guide for po­lit­i­cal in­vestors, in­di­cat­ing which prom­i­nent stocks the top pres­i­den­tial can­di­dates most closely re­sem­ble.

First, the Democrats:

Like GE, HRC is a blue-chip, a jug­ger­naut of the 1990s that, while still a mar­ket leader, doesn’t en­joy the ca­chet it once did. GE and HRC are both coast­ing on the rep­u­ta­tion of an iconic, charis­matic 1990s-era leader who stepped away from the na­tional scene in 2001 to write a best­selling mem­oir. Like GE, HRC en­joys high brand-name recog­ni­tion and spon­sor­ship among blue-chip Wall Street firms but lacks real re­tail pres­ence. Wants to use re­sources to take on global big needs. De­spite im­pres­sive growth in re­cent years, stock hasn’t been re­warded in the mar­ket­place. In the na­tional mar­ket of pub­lic opin­ion, both GE and HRC stand about where they stood five years ago. Hold.

Hil­lary Rod­ham Clin­ton: Gen­eral Elec­tric.

Both have posted as­ton­ish­ing growth since splashy ini­tial pub­lic of­fer­ings in 2004, and both have be­come dar­lings of Sil­i­con Val­ley. Net­worked and pop­ulist, Google and Obama have ben­e­fited greatly from con­tent gen­er­ated by oth­ers: mil­lions of news­pa­per ar­ti­cles and blog en­tries for Google and that hot vi­ral “1984” ad for Obama. Both have rung up im­pres­sive sales fig­ures based on small trans­ac­tions and en­joy in­cred­i­ble mo­men­tum and pop­u­lar­ity de­spite short op­er­at­ing his­to­ries. Both fa­vor vague, feel-good mis­sion state­ments: “Don’t be evil,” “Let us fin­ish the work that needs to be done and usher in a new birth of free­dom on this Earth.” Strong buy.


North Carolina-based fran­chises with South­ern charm and sweet de­meanor; busted out onto the na­tional stage in the late 1990s. Both phe­nom­ena peaked in 2004 and have since strug­gled to con­nect with cus­tomers. Sym­pa­thetic and com­pelling back-story hasn’t been matched by per­for­mance; in­suf­fi­cient at­ten­tion to up­dat­ing brand mes­sage for changed en­vi­ron­ment. Lack of in­ter­na­tional pres­ence a prob­lem. Th­ese days, Krispy Kreme loses out to ur­ban­ized, bet­ter-heeled jug­ger­nauts like Star­bucks and Dunkin’ Donuts; Ed­wards loses out to ur­ban­ized, bet­ter-heeled chains like Clin­ton and Obama.


John Ed­wards: Krispy Kreme Donuts.


Quick pick — Up­start with power base in south­west­ern United States try­ing to cap­i­tal­ize on grow­ing na­tional im­por­tance of His­panic con­sumers.

Bill Richard­son: Univi­sion.

Now, the Repub­li­cans:

Both en­ter­prises at­tempt to merge pub­lic ser­vice and private prof­its. Both were strug­gling in the late 1990s: Hal­libur­ton from tor­por in the en­ergy patch, Gi­u­liani from tor­por in his sec­ond term as mayor of New York. Events trig­gered by Sept. 11, 2001, led to swift rise in promi­nence and prof­itabil­ity. Both have shown bril­liant abil­ity to profit from po­lit­i­cal con­nec­tions: Gi­u­liani with a range of con­sult­ing con­tracts, Hal­libur­ton with no-bid con­tracts won by its KBR sub­sidiary. De­spite be­ing dogged by ac­cu­sa­tions of in­com­pe­tence and cor­rup­tion among staffers in Iraq (Bernard Kerik and KBR, re­spec­tively), stocks have risen sharply. Gi­u­liani went through messy pub­lic di­vorce from prob­lem­atic part­ner Donna Hanover Gi­u­liani; Hal­libur­ton went through a messy pub­lic di­vorce from prob­lem­atic KBR unit.


Ru­dolph W. Gi­u­liani: Hal­libur­ton.


Two old warhorses that have solid rep­u­ta­tions as pa­tri­otic brands but are strug­gling to hold on to shrink­ing mar­ket share. Strat­egy of re­ly­ing on large, gas-guz­zling ve­hi­cles (SUVs for GM, the Straight Talk Ex­press for McCain) no longer res­onates as it did in 2000 be­cause of chang­ing po­lit­i­cal con­di­tions in the Mid­dle East. GM is ham­pered by bur­den­some legacy costs that it will­ingly as­sumed: pen­sion and health-care prom­ises to unions. McCain is ham­pered by bur­den­some legacy cost that he will­ingly as­sumed: four-square sup­port of the Iraq war. Stub­born re­sis­tance to switch­ing strat­egy or adapt­ing to mar­ket con­di­tions by de­vel­op­ing new prod­ucts is hurt­ing both stocks. Sell.

John McCain: Gen­eral Mo­tors.


Th­ese blue-chip fi­nan­cial in­sti­tu­tions try to in­tim­i­date ri­vals with mas­sive bal­ance sheets but are hav­ing dif­fi­culty find­ing trac­tion in the mar­ket­place. Both are un­com­fort­able with their re­cent his­tory: reg­u­la­tory prob­lems and re­search scan­dals for Cit­i­group, a his­tory of mod­er­ate Re­pub­li­can­ism in Mas­sachusetts for Rom­ney. Trans­par­ently lame re­brand­ing ef­forts: Cit­i­group has be­come Citi; Rom­ney has be­come a gun nut and an abor­tion foe. De­spite em­ploy­ing bril­liant fi­nan­cial/eco­nomic minds (Robert Ru­bin at Cit­i­group, Gre­gory Mankiw and Glenn Hub­bard for Rom­ney), th­ese two stocks are tread­ing wa­ter.


Mitt Rom­ney: Cit­i­group.



Barack Obama: Google. Quick pick —

Both em­pha­size con­nec­tion be­tween Jews and sound money man­age­ment. Zions does so with its name; Thompson does so with ap­palling, border­line anti-Semitic re­marks.

Tommy Thompson: Zions Ban­cor­po­ra­tion.

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