MoneyScope Talk: Investing in a New Regime

Microsoft. The biggest company in the world by market value, could get a lot bigger if George W. has his way. Why? Well, the whole antitrust case could well be kaput. While George W. hasn’t said so directly (he’s gone on the record as being unwilling to comment on ongoing cases), he has smiled and said something to the effect of, he really believes in letting markets sort things out.

Stock Picks: Buy MSFT.

Telcos. Remember, Texas is home to one of the last regional Bell companies. Bush may favor these guys over the long distance carriers. The Bells want relief form the 1996 Telecom Act which inhibits them from entering the data business in local markets.

Stock Picks: Buy SBC, the pride of San Antonio. And Verizon.

A Gore Presidency

The old rules about a Republican being good for business, a Democrat, bad, have been thrown out the window. The new, business-friendly Democratic Party has shown during the past eight years of the Clinton Administration that it, too, knows how to preside over an expanding economy — nay boom time — as well as any gaggle of Republicans.

So, Al Gore in no way scares Wall Street. He may, for instance, be less intent on blocking big mergers than President Clinton, who was keen on this policy area.

Here then are some sectors and specific stocks which should make out in the new administration:

Pharmaceuticals. This is contrarian, so hang in there for a second. Conventional wisdom has it that if Gore wins, drug stocks will tank because Gore has pledged to beat up the drug companies. That, as far as it goes, is true. But the bottom line is, Gore will fail and that will be good for investors in these stocks, particularly if you buy after they get bashed. Same thing happened with President Clinton. He promised to get after the drug companies, the stocks took a dive after his election and stayed down. Then over a number of years, after it became clear that he wouldn’t be able to control pricing (and remember the Congress will likely be in Republican hands this time around), the stocks took off. Bottom line: Drug business is bigger than Al Gore.

Stock Picks: Merck, Pfizer, Bristol-Myers Squibb, Eli Lilly, the usual suspects.

Bonds. Al’s $500 billion in tax cuts over the next decade would be more prudent than George W.’s massive $1.3 trillion proposal. Plus, Gore promises to pay down the debt rapidly which would make way for sustainable, moderate growth, which the bond market loves.

Picks: US Treasuries.

Telcos. As the man who “invented” the Internet, Gore will likely push policies that provide broadband services to as many Americans as possible. So, long-distance companies, competitive local exchange carriers and satellite companies could do well.

Stock Picks: AT&T, Worldcom and Exodus Communications

Environmental clean up companies. I know, I know, not much of a stock group/investing play. But believe you me, these companies will be plenty busy with Enviro-Al in the White House.

Stock Picks: Tetra Tech, IT Group, Roy F. Weston, Ecology and Environment Inc., and Sevenson.

Alternative fuels. This is an even thinner market. Again the thinking here is that Al will give these guys a boost.

Stock Picks: Evergreen Solar, Fuel Cell Energy, H Power, Millennium Cell, Plug Power (a wild stock) and Syntroleum.

Pocketbook Issues

Losers in a Bush administration? Well, don’t look for environmental cleanup companies or those that are in the alternative fuels business to shine.

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