Where have you gone, H.L. Mencken? You are much needed in this year of “
Hamilton” ascendant on
Broadway, Trump triumphant with your “booboisie” and Clinton winning the hearts
of all who have told cops or spouses: “That’s my story and I’m sticking to it.”
Now, hip-hop “music” not being our cup of tea, we confess we have not rushed to see the runaway hit, and thus are at a cultural disadvantage to our more with it peers. So, we are left to wonder if its creators and players captured the contempt with which
so full-throatedly held full-throated democracy. “Your people, sir — your people is a great
beast!” In other words, Hillary’s basket
of deplorables; or Donald’s Mexican Muslims. We have met the enemy and he is us! Pogo declared
from the comic pages of the Sixties.
On second thought, that old scold Jeremiah put it best: “The harvest is past, the summer is ended, and we are not saved!”
But enough of sages profane and sacred. You, dear reader, come to us, for practical wisdom this weekend before the election.
Those of you anxious about domestic policy under either candidate should not be so – anxious, that is. With little chance of either party controlling executive and legislative branches, changes to tax policy or healthcare are unlikely.
Far from perfect, Obamacare is here to stay. Though premium increases have startled and high deductibles mean you’re really only covered if hit by a bus, it has not proven the job destroyer its critics foretold. Indeed, labor has become scarce enough to force wages to finally respond.
Thus, as far as the home front figures into it, the expansion will continue, only vulnerable, as it always has been, to a Federal Reserve pulling the tightening trigger too soon and too often. We think it a mistake to raise rates in December, as the Fed has indicated it will do; if it continues to squeeze money supply in 2017, recession will follow no matter who’s in the oval office. In our forecast for 2016, The Happy Few of 2016, we japed that Donald Trump would win. It remains a jape.
Among the names we cover, we remain buyers of J.C. Penney (JCP), which we believe is taking share in a smaller pie for brick-and-mortar retail chains. We still like Amazon (AMZN) because, well, it doesn’t sit still and has no significant challenger on-line.
On the avoid side, we still think Whole Foods Market (WFM) won’t command a premium PE again. There’s just too much competition to expand margins much beyond a regular old grocery store. Other retail and fashion names we’ve told you to avoid or sell – Michaels Kors (KORS), Under Armour (UA), L Brands (LB) and Macy’s (M) – remain unappealing to us on a long-term outlook.
We still think, as we explicated in “The Happy Few,” that there are few home runs in a market that is fairly to over-valued.
Neither Trump nor
will have the power to affect market valuations either way. For all Trump’s bluster, a Smoot-Hawley like
return to protectionism would likely be allowed by the corporate interests that
rule us for better or for worse. And Clinton’s late-hour
critique of the Pacific trade pact is an obvious pose.
Indeed, the real threat to prosperity is something we think both candidates would avoid – another military adventure as misguided as W’s fiasco in
Rest assured, gentle reader, something bad is bound to happen, but political fortune or misfortune for those who want to be the big dog won’t matter.