Stock Market Loves Trump or Biden?

[_Icarus]

I've noticed recently that all the ETFs I have in renewable energy companies like Enph, FSLR, Nova, Sedge and Run plummeted the other day. When I probed into why that was, I came across this article pointing out that news about Biden's lead narrowing in latest polls caused the dip.

https://www.fool.com/investing/2020/10/ ... hium-amer/

Apparently one of the big reasons why the stock market has been doing so well this year is the investments behind renewable energy. If Trump wins, I'm likely to lose huge, at least in the short term. With a Biden win these stocks are likely to skyrocket because what's driving them is the assumption of a new Green Deal under a Biden-Harris administration.

I thought that was interesting since Trump likes to assume credit every time the market spikes.

[_Gunnar]

Yet another good reason for hoping that Biden wins!

[_subgenius]

Your cited article says nothing in support of your claims in the OP for the performance of the market this year - with the exception of the no-brainer-for-a-first-grader statement that green companies experienced boost due to hopes that green new deal is coming if Biden wins. So, yeah - brilliant conclusion; got any other savvy market observations?

and can you be more clear in your posts for this year about how/when you consider the market to be doing well? or not well? and when it is because of Trump? or Obama? or pixie dust?

[_Philo Sofee]

Your cited article says nothing in support of your claims in the OP for the performance of the market this year - with the exception of the no-brainer-for-a-first-grader statement that green companies experienced boost due to hopes that green new deal is coming if Biden wins. So, yeah - brilliant conclusion; got any other savvy market observations?

and can you be more clear in your posts for this year about how/when you consider the market to be doing well? or not well? and when it is because of Trump? or Obama? or pixie dust?

All you have to do is listen to Trump......when things go good, yay me! If things go bad, it's China's fault, or Obama, Biden, the Mormons, could be the Catholics, Protestants, Jews, heck, it could be the fault of Democrats, kangaroos, or even dolphins! But Trump??? NEVER! :rolleyes:

[_Icarus]

Your cited article says nothing in support of your claims in the OP for the performance of the market this year - with the exception of the no-brainer-for-a-first-grader statement that green companies experienced boost due to hopes that green new deal is coming if Biden wins. So, yeah - brilliant conclusion; got any other savvy market observations?

and can you be more clear in your posts for this year about how/when you consider the market to be doing well? or not well? and when it is because of Trump? or Obama? or pixie dust?

Renewable energy has been booming for quite a while now.

Despite President Trump’s skepticism, wind and solar funds are beating this year’s bull market
https://www.wsj.com/articles/here-comes ... 1560132300

Renewable Energy Remains One of America’s Most Attractive Investment Options
https://www.greentechmedia.com/articles ... New Testament-options

I guess you just don't know much about investing, hardly surprising. Anyone with any amount of experience trading knows that renewable energy has been one of the hottest markets over the past year. All you have to do is pay attention to the numbers. S&P 500 has risen 54% since March but not a single top 20 company has kept pace with that growth. In fact roughly half of the top 15 companies have had negative growth this year. The sector that has been exploding is in renewable energy. Here are the increases this year for some of the companies I've invested in:

Tesla +402%
NIO +575%
Nikola +120%
Invesco Solar +200%
Enphase +295%
Plug Power +375%
Sun Power Corp +230%
Sun Run +305%
Solar Edge Technologies +197%
First Solar +62%

[_Gadianton]

Everything I've followed market-wise seems to slightly favor Biden even though the most direct impact to business would be raised taxes. More often then not, the point is made that who wins won't affect the market that much. The biggest risk is uncertainty that Trump would bring by failing to cede power. There is a lot of good recovery news, and the market should be doing better, but it lives in fear of Trump for the short term. I wonder if this is the first time in history that a president is such a threat to American prosperity in other unusual ways, that the stock market more or less sides with the higher tax alternative?

Policy can clearly affect sectors in the stock market, but it's not much of a win for the market as a whole to say that clean energy is up because Biden will be friendly to clean and thus, dirty energy is respectively down. Policy causes trade-offs. For those who believe in policy in terms of "stimulus", the point would be for policy to lead to a net aggregate gain. And of course, policy, to the extent that policy helps, should be geared toward the economy and not the stock market.

Clean energy stocks have the same problem as tech stocks, they're significantly over-valued (by traditional measures; I have to disclose that I still hold to the unraveling threads of market efficiency). "Stimulus spending" is helping to drive the absurd valuations of tech and clean energy stocks far more than any policy plans from either side. If you're a value guy like Analytics, you should be drooling over dirty energy. There are some great companies with P/B as low as .2. It's really hard to conceive that Enphase at P/B 35 is 175x as profitable in the long term as SM energy, struggling at .2.

I can't predict the future, but one likely scenario is that tech and clean energy will drop significantly -- and soon. Some of that money will go into Value sectors, but a lot will simply disappear. So here's how that happens:

A pandemic hits. The sky falls. The government responds with "stimulus", but our world has forgotten what stimulus actually means. In Keynesian / traditional macro economics, stimulus means government spending to kickstart an economy that is hording dollars. Since that isn't our problem, what the government is supposed to be doing is giving people disproportionally affected loans, or what amounts to short-mid term forgiveness of debt. Sending 2400$ to millions of middle-class families not affecting isn't helping anyone, it's hurting -- that's either a) vote buying, or b) policy at the hands of officials who don't know anything (my check was singed Donald J. Trump. What a loser). The hope would be that 2400$ would go to consumption, for people who are consuming less. But if you're not struggling, why consume? Put it in the stock market and make more!

Ironically, actually buying things companies actually make is what should drive stock price. And a little of that is happening, but a whole lot more is skipping that part and going straight to the stock price. So what happens is the government borrows a trillion or so that goes into the hands of people who don't need it, who put it in the stock market, valuations skyrocket, but eventually the printing press will stop, and then what? When the hope fades of making 5% a week, people run for the exits. A great deal of that money will simply disappear. It disappears, but the government is still technically on the hook to pay it back.

So no, driving financial markets with "stimulus spending" is not a good thing. It's completely stupid, in fact.

Clean energy took a big hit when Bloom Energy got dumped by a Hedge Fund. No news, just a big dump. That's a problem, because now you look at other clean energy stocks and compare them to Bloom and you've got two options: Reason that the Hedge Fund made a bad call and start driving the price back up, or start questioning how these other clean companies are worth so much more.