election day +2

The election still isn’t decided. Nevertheless, the stock market appears to want to put Trump’s idea of restoring the world of the 1950s in the US into the rear view mirror as quickly as possible.

Day 1 seemed to me to express three ideas:

–the pandemic will continue to have negative effects on the US economy for some time to come. Therefore look for structural change beneficiaries rather than GDP-sensitives. Get exposure abroad, where government pandemic strategy has been more competent

–Washington will be gridlocked. As a work colleague put it thirty years ago, Democrats have a cultural program but no economic one (he also said Republicans don’t believe in much of anything other than their then budding alliance with evangelicals). I find it hard to see what an administration change will do other than end Trump’s dismantling of the American economic growth engine. Therefore, look to companies with international exposure

–the biggest beneficiaries of Trump’s four years, as I see it, have been Russia, China, heavy domestic polluters and natural resource miners. Under Biden, that all would likely change. The last two groups would likely be the biggest losers.

Although I’m happy to ride the current wave, which is at least partly a rebound from the pre-election selloff based on fear of a “Blue Wave” Democrat sweep, an awful lot of the current enthusiasm seems to hinge on developments in Pennsylvania and Nevada/

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