The Obama Stocks

In the coming days and weeks traders are going to scramble to identify stocks that are likely to benefit from the Obama presidency. Alt energy? Stem cells? Should you join the rush?

In a word: no. Unless you are a short term trader and fast on your feet.

1. Obama is not even in office yet. Euphoria tends to wear off fast with new information. Pretty soon reality will set in, and it's not looking pretty.
2. Obama is inheriting an economy in pretty bad shape. There are too many problems waiting to be resolved before any sustainable new direction can emerge.
3. You don't know what cards the future will deal Obama and how he will play them. What if Israel bombs Iran (or the other way round)? Who will benefit, CLNE or NOC?
4. There is a huge time lag between promising something and coming up with a plan, getting Congressional approval and funding, and implementing before a single entity can benefit - trickle down economics, if you will, Democratic style.

There is only one way to know for sure who the beneficiaries will be: profits. Wait for profits to show instead of going by somebody's predictions or agenda.Companies (and stocks) that will ultimately benefit from the Obama presidency must show huge sustainable profit growth. This profit will have to be reported. No need for guesswork. Just wait. Profit growth rarely ends after just one quarter. You will have plenty of time to make money without unduly risking your capital.

Until then, you are at risk of being jerked around by predictors and people with agendas.

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