Trading the Obama Transition

We now have plenty of evidence verifying my viewpoint that the more moderate Obama was the correct read. The Obama appointments have been bipartisan, reaching out to various economic perspectives and even including gestures to philosophical camps like the religious right. The tone of the administration will be one of addressing a difficult challenge: Obama is trying to bring together many disparate viewpoints.

The economic crisis has changed the prospects for Obama's first 100 days. I am developing a more nuanced analysis that considers which policies are on the fast track and which will come later. This is an ongoing project reported on my election stock analysis site. Here is a general hierarchy:

1.Changes via executive order. These policies are issued by the President and have the force of law.

2.Agency policies changed through appointments. These can also happen very quickly. An example would be SEC changes. (We can only hope!)

3.Legislation that attains bipartisan approval. These bills can be passed quickly by a new Congress and signed by the new resident. The effect may extend over a period of time. The stimulus package is a good example.

4.Legislation that can be included in the budget reconciliation process. This legislative trick can avoid the omnipresent Senate filibuster threat and the need for a 60-vote majority.

5.Legislation that requires full support in both houses. These bills will need a cloture vote in the Senate, so bipartisan support is essential. The big taxing and spending issues probably hit this category.

The timing of proposals, implementation and stock effect is challenging. Our analysis is a work in progress. Having said this, there are some good examples.

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At the time of publication, Miller was long KOL, although positions may change at any time. Jeffrey Miller is president and CEO of NewArc Investments, a registered investment adviser, and Capital Markets Research.

Miller writes about the market, interpreting data, and finding the right expert at his blog, "A Dash of Insight. He is writing about the 2008 presidential campaign and the implications for individual stocks and the market at Election Stocks. His investment company, with programs for both individual and institutional investors, is NewArc Investments.

Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Miller appreciates your feedback; click here to send him an email.