The beauty and the moron
As a net buyer of stocks during the next 4 years, I have a vested interest in cheap valuations. But cheap valuations are hard to come by. Especially when a president is smart and his efforts to enrich his Wall Street buddies are well thought-out and efficient. No big mistakes are being made, every blunder gets quickly recognized and correctred, the banking system functions like a Swiss clock, and S&P is one big bubble of gigantic proportions. That's what we had under Clinton - a totally unassailable stock market fortress that never offered a good entry point.
Although there are no differences between the two parties, to the extent that personalities matter, the election of a stupid president can shift the odds slightly in one's favor. The Bush presidency was a golden era for beginning investors. The failed Irak adventure, the botched tax reform, the enrichment of oil companies and, lastly, the ethanol saga, all contributred to dampen investors' enthusiasm, and the general impression that the Bush administration has a magic Midas touch (think the George Bush sewage treatment plant working in reverse mode) created a feeling of pessimism even in the rare cases when Carl Rove's sound bytes made sense. The Dow 11000 did not materialize by accident. All those who feel excited about current valuations must feel grateful to Bush.
So should we beginning investors congratulate ourselves with this chance to elect another useful idiot? Not so fast. The problem is that the stupider candidate may just be too stupid to win this election. True enough, all election victories were always achieved with the help of cheap PR tricks, but the important thing is to recognize that you can't win a campaign by PR alone. When the gap between the image and the substance becomes too wide, people will become suspicios of otherwise perfectly good PR tricks merely because these tricks are coming from someone who's lost credibility. So yes, you can always embellish the substance of your program with some nude pics, but when the substance is missing entirely, your hope to carry 26 states thanks to the effectiveness of Palin commercials is pure wishful thinking. Irak? Housing? Health care? Taxes? Oil? Any meaningful message other that "let's leave everything as it is, and by the way, I have a pretty girl for you to vote for in case you're missing Hillary"? Look here, you cannot point to a deer and say, "it's a horse" unless the person you're talking to really wants to believe that it's a horse, and as far as Hillary fans are concerned, you can't replace Hillary with an anti-abortion activist giving birth to babies with down syndrome and hope nobody would notice the difference. Once upon a time, merchants would buy islands in exchange for glass beads and iron nails and blankets. The kits sold like hotcakes. But notice that these kits always combined useless trinkets with some objects offering an apparent tangible value to the voting members of the tribe. The merchant would always throw in a nail or two. Now, the progressing stupidity of Bush's team resulted in a successor who's utterly lost his sales pitch and is now hoping to close the deal by offering nothing but glass beads. This is not very good news for the investors hoping for another "useful idiot" discount. We have a perfect useful idiot who is going to lose the election in a landslide. Now, how useful is that?