We assiduously avoid political commentary in the Energy & Income Advisor; subscribers don’t pay us to share our political views. But judging from the sheer number of questions we received about how the recent US presidential election will affect energy stocks, we’d be remiss not to apply the same rational, dispassionate lens that we apply to our coverage universe to the implications of President Obama's victory.
Every four years, investors must endure a barrage of half-baked articles and sales promotions touting stocks that will benefit if the Republican or Democratic candidate ascends to the White House. True to form, at least two investment banks promoted baskets of stocks that would benefit if Barack Obama retained the presidency and another group that would outperform if Mitt Romney prevailed.
Given the passions that the quadrennial election stoke, these trite stories tend to attract significant attention and, unfortunately, prompt investors to make their fair share of bad decisions.
That’s not to downplay the very real influence that political decision-makers exert over the economy and the strength or weakness of individual sectors. In fact, the significant differences between Obama and Romney’s policies mean that the outcome of this presidential contest will have important ramifications for the economy and stock market.
But investors shouldn’t allow their political affiliations to dictate their portfolio decisions. Moreover, the majority of articles that highlight the best stocks to buy in the event that one candidate wins the election tend to follow sophistic logic and are more likely to generate losses than gains.
In this issue, we revisit our outlook for the coal producers and explain why President Obama's reelection, though not ideal for Focus List holding Peabody Energy Corp (NYSE: BTU), doesn't mark the beginning of the end for the coal industry.
We also analyze developments in international markets for liquefied natural gas (LNG) and reiterate our near-term preference for LNG shippers with solid contract coverage.
Your complete guide to energy investing, from growth stocks to high-yielders.
In October 2012, renowned energy expert Elliott Gue launched the Energy & Income Advisor, a twice-monthly investment advisory that's dedicated to unearthing the most profitable opportunities in the sector, from growth stocks to high-yielding utilities, royalty trusts and master limited partnerships.
Elliott and Roger on May. 9, 2013