Stocks Under Bush and Gore

N E W  Y O R K, Nov. 6, 2000 -- Think George W. Bush is going to be the nextpresident of the United States? Maybe you should bulk up yourportfolio with some oil and defense industry stocks. Betting on AlGore? Then you might want to go for more shares in broadbandtelecommunications or environmentally friendly recycling companies.

That’s the consensus of securities analysts who have beenhandicapping stocks that could get a boost or take a beating,depending on the outcome of Tuesday’s presidential election.

Investors Urged to ‘Wait and See’And while they’ve got growing lists of likely Wall Streetwinners and losers culled from the promises made by the candidates,stock experts urge investors to wait to make any major stockpurchases or sales until after the votes are counted.

“The race is so close that no one can predict who the winner isgoing to be,” said Sung Won Sohn, chief economist at Wells Fargo &Co. of San Francisco. “And who controls the Congress also matters.A lot of campaign proposals have to get congressional approval, andsome aren’t going to make it.”

In addition, some of the stock market volatility in the waningdays of the Clinton administration could ease after the election,making stock picking easier.

“Right now, the market is moving on the four Es — energy, theeuro, earnings and the election,” said Alan Ackerman, seniorfinancial strategist at Fahnestock & Co. in New York. “Theelection will eliminate one of those uncertainties.”

Profiting from a Bush WinA number of brokerages, including Prudential Securities, LehmanBrothers and Merrill Lynch, have published lists of industriesexpected to get post-election boosts, depending on who’s declaredthe winner. A Bush win appears to give the biggest lift to thewidest variety of stocks.

“Bush has to be viewed as the favored candidate of the equitymarkets, not only because of his likely blunting or reversing ofthe Clinton-Gore regulatory and antitrust agenda, but because ofhis market-based Social Security proposals,” said Charles A.Gabriel, a political analyst for Prudential Securities inWashington. Conversely, “Gore is seen as more friendly to bondmarkets.”

Among the industries Gabriel expects to get a lift from a Bushvictory are defense, which stands to get more funding for generalmilitary preparedness and missile systems, as well as tobacco,which he believes is likely to incur less White House wrath fromRepublicans than from Democrats.

He’s also high on energy stocks, in part because of Bush’s ownhistory of involvement in the oil sector.

“It’s long overdue for the U.S. to recapitalize the energysector,” Gabriel said. “We’ve gone so long without much newdrilling activity … [amid] Clinton’s environmentally drivenenergy policy.”

Profiting from a Gore WinAt Lehman Brothers, analyst Kim Wallace expects a Gore victorywould boost companies making fossil fuel alternatives such as fuelcells, as well as telecommunications shares.

“We believe that Gore will continue pushing policies that playwell for companies providing broadband services to as manyAmericans as possible,” he wrote in a memo on investment strategy.“Long-distance, competitive local exchange carriers and satellitecompanies probably do better under Gore.”

Wallace also suggests Gore likely would maintain the currentadministration’s stance against Microsoft, which is hunkered downwhile it appeals a Justice Department antitrust case. This, LehmanBrothers argues, could help competitors like Sun Microsystems and Oracle.

How Will Others Do?There’s general agreement that the financial services industriescould be a big winner if Bush is elected and presses ahead with hisplan to allow Americans to invest some of their Social Securitycontributions through private managers. The analysts mention mutualfund companies Franklin Resources and T. Rowe Price Associates aswell as brokers Charles Schwab and Goldman Sachs, among others.

There’s some disagreement over how the health sector will fareunder Republicans or Democrats.

Gore has sharply criticized health maintenance organizations,has accused pharmaceutical companies of profiteering and wants aprescription drug benefit added to Medicare. Many analysts, as aresult, believe health care and pharmaceutical companies’ shareswill do better under Bush, who takes a more laissez-faire approachto regulation and backs a plan to help low-income seniors buyprivate health insurance and drug coverage.

While Lehman Brothers sees a Bush win as helping the health caresector, it adds: “Other pundits’ panic over a Gore win isoverblown.”