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Trading the Obama Transition

By Jeff Miller

About this article:
We are all hard-wired to react with suspicion whenever we hear the statement, "This time is different." However, sometimes the statement is true. The 2008 election was unprecedented in many ways, including its unusual effect on stocks. The economic crisis overwhelmed the normal attention to specific stocks and sectors. The boost to a sector from one candidate's victory was overwhelmed by massive volatility from the economic crisis. There was no way to win from an early investment in "Obama stocks" since everything was going lower -- much lower. In anticipation of the election, I developed a research project to analyze the various candidates and the stocks that would benefit from different outcomes. I fully expected specific stocks -- and the overall market -- to respond in traditional fashion, which proved to be incorrect. Many of my astute colleagues at RealMoney suggested before the election that there...

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