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Can You 'Obama-Proof' Your Portfolio?

An interesting phrase is starting to bubble up on Wall Street these days: "Obama-proof." As in: Are there any stocks you can buy that are Obama-proof?

What it means: Wall Street generally opposes government intervention into businesses, and it's seeing a lot of it these days.

Obama-proof stocks are those of companies that have so far not been targeted by the government for new regulations or expensive requirements, each of which raises costs for a company and can drive down stock prices.

So, for instance, the stock of financial institutions, like the big banks, is hardly Obama-proof. That sector is already seeing a lot of government intervention in terms of conditions being placed by the government on bailout money.

Businesses that are dependent on fossil fuels, such as mining companies and utilities, are not Obama-proof either. They will be heavily affected by the administration's cap-and-trade environmental rules, which will raise costs for those companies and might drive down stock prices.

Jim Cramer, host of CNBC's "Mad Money," says here that it's impossible to build a completely Obama-proof portfolio. The best you can hope for is to build an "Obama-resistant" portfolio.

One of his suggestions: Buy overseas stocks that are beyond U.S. taxing authority.

Today, traders on Wall Street are buying what they hope are Obama-proof stocks, analysts said, which include those of lower-end retail stores and technology companies, reasoning that they are unlikely targets for government intervention, at least not yet.

-- Frank Ahrens
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By Frank Ahrens  |  March 4, 2009; 2:47 PM ET
Categories:  The Ticker  | Tags: Jim Cramer, Obama, stocks  
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Comments

People are still listening to Cramer? The man who said the Bear Stearns was fine? The man who said that the market would be fine even if subprime mortgages imploded?

A wise man or woman would do the exact opposite of anything that Cramer says you should do. Or, at least that's what Cramer's track record says.

Posted by: associate20 | March 4, 2009 10:05 PM | Report abuse

Cramer is extremely negative. I don't pay too much attention to what he has to say. If you can't find a positive anywhere then you are a Cramer. As far as Obama-proofing my portfolio...that is the dumbest thing I have ever heard. The entire administration needs to price the toxic assets once and for all and create a bad bank to transfer all of them to. They also need to partner with private investors in the bad bank as many of these so called toxic assets will bear fruit some day. Obama should lead the effort to stablize our finanacial system once and for all but Obama proofing your portfolio is a stupid suggestion. Bryon Fessler , Irving TX

Posted by: BryonFessler | March 5, 2009 4:54 PM | Report abuse

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