I wrote an article entitled " Watch the Republicrats", on October 12, 2005. I really think it is worth reading the article again, particularly if you didn't see it last year.
The article will give you a perspective about our current culture, and hopefully show you how to profit from the publics mistakes.
Watch the Republicrats
I want to start out by saying that I hate politics. I am hesitant in bringing this topic up because so many people are blindly associated with one side or the other. In order to be a successful investor, you can never be blindly bullish nor bearish. So, to remain open-minded and neutral, I want to discuss how many people today are no longer Republicans or Democrats, they are instead, Republicrats. This inbred breed of new political and social beliefs has had a profound impact on our economy and society.
I will get to an important investment point here soon, but we need to realize that many of the social issues facing our country have had, and will have important economic consequences in the future.
My grandparents, on my fathers side were immigrants from Armenia. They were the most decent, moral, and unselfish people Ive ever known. They were also Democrats.
Back in their day,
1) Democrats stood up for the poor and working class.
2) Republicans were for the rich.
Today, (if they were still alive) there is no way that my grandparents could identify with the belief system of either the Democrats nor the Republicans.
Today,
1) Democrats talk a good game of supporting the poor and working class, but their main a focus is promoting the social issues important to the ACLU rather than protecting the jobs of the working class and the poor.
2) Republicans talk a good game of morality and lower taxes, but give big corporations tax breaks to ship US jobs overseas, and allow the rich run rough shot across the average American.
So, what we are left with are; Republicrats
Come on now, youve seen them too. Of course, Republicrats are not a new political party, but a mutated subculture that share the some of the same political and social beliefs of both political parties. Many of these mutants are running our government today.
I do not, and will not get in a debate over politics, because this has more to do with a belief system than it does politics. When people vote today, it is more of a battle of whats in it for me rather than whats good for the nation. We see this ME, ME, ME crowd everyday. They are the get the hell out of my way crowd, they are the Im more important than you crowd, they are the Im smarter than you crowd, they also;
-Run red lights at intersections
-Ignore speed limits
-Are stock market experts at NASDAQ tops
-Are Real Estate experts during bubbles
You know what Im talking about? During political campaigns, why are there signs promoting Republicans in front of medical offices, and Democratic signs in front of attorney offices?
I know many attorneys who are wealthy, so they should be Republicans, right? I know many doctors who have the same social beliefs as the ACLU, so they should be Democrats, right? No. it all goes back to whats in it for me.
The Point: Belief Systems Trigger Economic Opportunities
Ok, enough of that stuff. Now lets make our point. You may be asking, what does this have to do with investing and making money; Believe it or not, everything.
Not long ago, President Bush boldly claimed that Ronald Reagan help defeat communism by convincing the Russian Prime Minister to tear down the Berlin Wall. This was, of course, was one of the greatest feats of the 20th century. We as Americans find communism as one of the great evils in the world, and have said so when President Bush called North Korea an axis of evil.
Correct me if I am wrong, but isnt China and Vietnam still communist? So, what are we doing now, cherry picking who the good communists are from the bad communists? Obviously, Americans are allowed and even encouraged to invest in China and Southeast Asia. Heck, we like good communist so much that we are willing to send them American jobs. This reminds me of a line in the Wizard of OZ; Are you a good witch or a bad witch.
On the other hand, the administration has been highly critical of the Venezuelan dictator, Hugo Chavez. Does Venezuela have control of something they want and cant get their hands on? Yep, oil. Venezuelas major oil company has 14,000 gas stations in the US under the name, Citgo.
See, Republicrats are very predictable as long as you keep in mind the whats in it for me scenario.
During the Clinton years, with the acceptance and mainstreaming of homosexual lifestyles came a concerted effort from to politicians to fight aids. Millions upon millions of dollars were earmarked to find a cure for aids. Investors who paid attention made a fortune by investing in Biotech stocks that were the recipients of these grants. Today, Republicrats have put together a huge effort to fight aids in Africa, and Biotech stocks are soaring.
Repubicrats are dying to own technology, and flat panel screen TVs. This is great for Best Buy (BBY). Republicrats are trading in their SUVs for more fuel efficient hybrid vehicles, and Toyota (TM) and Honda (HMC) are trading at all time highs. During the SUV boom GM was trading in the 60s, two days ago they hit a 52 week low. The Republicrats created one of the best shorting opportunities of the century in NASDAQ stocks in 2000, and now have done the same with the Homebuilding Stocks.
Finally, when the Republicrats get creamed in Real Estate speculation, they wont have enough money to shop anywhere but Wal-Mart (WMT), by then, it will be time to buy real estate again.
Bottomline: Watch the Republicrats; they are the best sheep I have ever seen.
