I'm Sure the President Means Well

 | Jan 29, 2014 | 8:16 AM EST
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I know it's hard to imagine, but there was a time when you used to hang on every word of a State of the Union address. You could figure out where the money was going, where the federal government was going to put your dollars and how they would be allocated to help industry.

I remember listening to Ronald Reagan in some of his earlier addresses, when he was talking about building up the Navy to 600 ships. Reagan had the ability to get it done, and there were enough naval-contracting stocks to allow you to invest in the companies and watch multiyear moves.

Under President Clinton were technology initiatives that could be played, credits given that would turn into earnings. It worked.

I can't recall spending a lot of time sussing out President Bush's State of the Union speeches, which were muddled affairs hamstrung by wars after the Sept. 11, 2001 attacks.

Even when Obama first came in there were investments that could be made. That was particularly so when it came to medical-records names and companies that were perceived as able to take advantage of universal healthcare. In fact, the Obama Administration's emphasis on universal health has been incredible for a particular set of healthcare-industry stocks: those names that are meant to manage costs and benefits in the healthcare system, mainly Cerner (CERN), McKesson (MCK), Cardinal Health (CAH) and AmerisourceBergen (ABC).

I don't know if President Obama realizes it, but these four companies have been consistent winners during his time in office thus far, and it's in large part because of the need to keep down rising healthcare costs -- a trend that the government has done little to help stop. These companies are truly four of the most powerful companies in the world that very few people have heard of. They have gamed the system, but in a way that's actually beneficial, especially to their shareholders.

These days, though? I find the State of the Union to be a painful speech. I think the president means well, but don't they all? It would be terrific if we really could cherry-pick, say, the good parts of globalization, and block the bad -- if we could force other countries to take more U.S. goods while not taking our jobs and polluting less with the jobs they do take. But we all accept or ignore that globalization means losing lesser-skilled jobs here to countries with less stringent pollution controls. They import our jobs, and they export their goods and their climate destruction. This is not all that investable, when you think about it.

The MyRA bond idea? Count me in. I want a risk-free bond with a higher return than those of other risk-free bonds. So do 310 million other Americans.

The natural-gas nod? I saw people getting excited that he was at last embracing natural gas as a bridge fuel. But then I did a close textual analysis of the 2012 inaugural and its aftermath, and saw he did the same thing back then -- and nothing happened, nothing at all, from the federal government's perspective. Take this quote from last night's speech: "I'll cut red tape to help get states get those factories built and put folks to work and this Congress can help by putting people to work building fueling stations that shift more cars and trucks from foreign oil to American natural gas."

But there's no real red tape to cut to build factories that use natural gas, and Congress has systematically refused to help put people to work building fuel stations that shift more cars and trucks from foreign oil to American natural gas.

Two years ago, immediately after the State of the Union, the president flew to a UPS (UPS) hub in Las Vegas that was using natural gas as a surface fuel. The excitement around the president's view spiked shares of the biggest nat gas station builder, Clean Energy Fuels (CLNE), from $12 to $24. But the stock was back to $12 four months later, as nothing whatsoever had been done to move the ball at the federal level. Same goes for Westport Innovations (WPRT), the maker of natural-gas-fueled truck engines. That stock went from $27 to $48, and then back to $22, in that exact same arc. Let's adopt the view of The Who: We won't be fooled again.

We just have to face it. The president can't get anything through a divided Congress. It was a very nice speech that would make America stronger if some of the initiatives were able to happen. But I sure wouldn't invest that way. You shouldn't either.

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