This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Doug Kass on The Business of Politics

This column originally appeared on Real Money Pro at 8:30 a.m. EDT on Oct. 22.

NEW YORK ( Real Money) -- My baseline expectation is that the November election is still the President's election to lose and that Obama will win with a reasonably comfortable electoral college margin of victory (of 35 or more votes) and with a majority of the popular vote. I am also assuming that the Democratic Party maintains (in a cliffhanger) control of the Senate, while the Republican Party easily keeps control of the House of Representatives.

I am not injecting my own political view. Rather, I am drawing from the most thoughtful and balanced polls extant, with my baseline election outcome being heavily weighted by the input from " Nate Silver's Political Calculus," as I have found his methodology to be more analytical and objective than most of the other pollsters and, most importantly, his past forecasts have proven to be among the most correct.

Silver predicts that Obama has a 68% chance of winning (I am at 65%, see below); he projects Obama receiving a 50.0% popular vote vs. Romney's 48.9%; and he is forecasting that Obama wins 288 electoral college votes against Romney's 249 electoral college votes. In addition, my base case is partially influenced by Intrade and RealClearPolitics, which could change in the days ahead.

While I am mindful of the general view that a Republican presidential and Senate win next month would be more market- and business-friendly than a Democratic win, there is little historical correlation between stock market and economic health based on which of the two Parties' nominees win. I can show as many examples, over time, when a Republican presidency is not market- and business-friendly as I can in demonstrating that a Republican presidency is market- and business-friendly. The same holds true for the Democratic Party. Sometimes a Democratic victory presages economic growth and a vibrant stock market, but the opposite occurs with about the same frequency. (I will spare you the historical comparisons because you will, no doubt, be inundated with these historical tables over the next two weeks.)

In reality, we have to recognize that every political cycle's impact on the business and market cycle is nuanced and can't be easily generalized.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free

Markets

Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs