Monday, November 3, 2008
(Cont'd from above)...

You know this market today was all election, because these two ETFs usually trade in lock step, as alternative energy seems less likely with oil going down... except if Obama gets in.

Since Obama is ahead in the polls, we're going to start with the stocks that benefit under an Obama regime...

We know that Senator Obama has been a staunch supporter of renewable energy. He's proposed spending $150 billion... hey, why not... didn't we just give that to AIG?... $150 billion over the next 10 years on clean energy, and reducing carbon emissions. I have to imagine the CEO of Cramer-fave... at least when oil was going higher... First Solar (FSLR)... gets a quick jingle within a couple of days of an Obama victory. Hey, let's set him up for solar... The wind plays could also benefit the... why don't you think of a washed-out Trinity Industries Inc. (TRN*), which we interviewed last week. They make wind towers. Broadwind Energy, Inc. (BWEN.OB), a very speculative full-service wind name that has been slaughtered by hedge funds gone wild, and Owens Corning (OC), which makes the composite materials used to make windmills... That should work, especially now that the OC has been slammed...

There may even be an opportunity with natural gas, since it's a cleaner-burning source of energy. If Obama pushed for more formal adoption of natural gas fuels, we would actually like down and out Chesapeake Energy Corp. (CHK), and we would probably even recommend XTO Energy Inc. (XTO) or Devon Energy (DVN*)... But he will not favor big oil, and we are pretty sure Obama doesn't like coal, because he's always talking about clean coal, something we know doesn't exist, and it's a total canard... which mean no coal...

Now, for the more cynical winners from an Obama administration... the ethanol plays... at least not VeraSun, which filed for Chapter 11... Because the Iowa caucuses come first, pretty much every presidential candidate has to pander to the ethanol lobby - something Obama's done quite well - with his plan to produce 60 billion gallons of biofuel a year, by 2030. McCain actually abstained from ethanol pandering, which is why he didn't do so well in Iowa.

We hate ethanol on this show, particularly with oil in the $60s. We think the biofuels mandate is terrible policy. But it's also profitable policy for the ag stocks. And I'm going to highlight two of my favorites later in the show, both of which could be gigantic winners with Obama in the White House pushing ethanol.

The fertilizer plays are some of the best-positioned here. I'm saving my top one for later in the show, so you have to watch the rest... But you can bet Potash (POT), Mosaic (MOS) and Agrium (AGU) will all get a one-time Obama boost.

As for healthcare, we have to remember that, even though democrats traditionally hate big pharma, they also love biotech in equal amounts. My favorite election biotech plays... Celgene Corporation (CELG*) and Gilead Sciences Inc. (GILD*)... I own them both for ActionAlertsPlus.com, my charitable trust... though we've got to remember that big pharma sold off in 1992, before Clinton, only to flourish under his administration... so you wouldn't be a nut to take advantage of the obvious decline in Merck (MRK), with its juicy yield, on a pullback based on the fears that Obama will target the drug companies... It's more likely he will go after the insurers, and the health maintenance organizations... sell, sell, sell... like WellPoint Inc. (WLP), which is probably doing the best of all of them... Humana Inc. (HUM)... and Unitedhealth Group, Inc. (UNH)... all of which, by the way, would thrive under McCain. But Obama is a big hospital supporter as a frontline on the healthcare for all, which is a big part of his campaign, which means you can buy a real speculative one... a $4 number... that's right, Tenet Healthcare (THC)... will probably be the only thing you will take away from this whole segment... maybe the whole show...

An Obama win will also mean more relief for troubled homeowners, and that should help some of our favorite banks, like the Fortress Banks... Wells Fargo (WFC) and Bank of America (BAC)... two of the four... along with some homebuilders... I don't know. Those are tough. Let's just go with Toll Brothers (TOL), okay, because the others are really hurting.

Now, how about McCain?... What company should do well if he pulls off the ultimate upset?...

First of all, it's the drillers... McCain's "drill here, drill now" message, and his strong support for offshore drilling, all say to buy Halliburton Company (HAL) and Transocean Inc. (RIG). They would be big beneficiaries. I pick those because they were both downgraded by Goldman Sachs today, so they are ready for entry. Remember, RIG reports this week, so we've got to be careful...

Then, there are the specifically-offshore names that we had focused on back in June...

CGV (CGV), Oceaneering (OII), Smith International (SII), Hornbeck Offshore (HOS), FMC Corp. (FMC).. that will benefit if we lift the offshore drilling ban. Now, of course, because Obama's been so favored, these have been complete dogs. Maybe it reverses if McCain wins.

Unsurprisingly, a McCain win should be good for big oil too. Exxon Mobil (XOM), which was actually quite strong today... Chevron (CVX*), which I own for ActionAlertsPlus.com, my charitable trust... Valero Energy (VLO), and don't forget, new Cramer-fave, Marathon Oil (MRO), which we talked about on Friday and went down today, because oil was down $3bucks...

But, even though McCain is more hawkish than Obama, there are some defense names that will work regardless of who wins. The military names that should work no matter who, are KBR, Inc. (KBR), a strong name that provides logistic services for the military. It's trading below $15, with $9 a share in cash... Again, a victim of hedge funds gone wild...

And then there is AeroVironment, Inc. (AVAV)... Remember, we just brought that company on (for an interview) last week. For those who don't watch the show, you're very challenged by this... That makes unmanned aerial vehicles to help reduce casualties, a trend the government will want to continue under either candidate.

We think AeroVironment, Inc. (AVAV) is on a tear, and like THC, these are the two great speculative plays on an Obama victory.

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Here's the bottom line...

The bottom line!:     Tomorrow, we will find out which corporations will be blessed by the White House for the next four years... which will be solar, wind and ethanol companies that Obama favors... or the offshore drilling, nuclear power and defense companies that should mean more business in a McCain presidency. For once, I report, and you get to decide, and to repeat the two speculatives (i.e., stock picks from Jim), because that's what you're trying to write down... It's Tenet Healthcare (THC) and AeroVironment, Inc. (AVAV)...

[verbatim recap]

Read Jim's next Segment here