Cramer: We Could Be Setting up for Some Presidential Bargains

 | Sep 26, 2016 | 3:46 PM EDT
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You are witnessing the selling that always comes with uncertainty, the uncertainty of who is going to triumph in tonight's debate. It's the reason why the market went down because the styles of the two people could not be more different, so the risk is much higher than when you get a runaway front runner.

Is the fear right? Should we be going down this much? Is there more than just style involved?

I don't want to make any determinations because, frankly, that's up to you. My expertise is stocks, not politics and I am uncomfortable even going there for an evening. But to not address the elephant in the room is to ignore stock price action and we can't do that.

So, where do we begin? Let's talk about what business thinks first. As the Wall Street Journal wrote in an amazing story last week "No Fortune 100 CEOs Back Republican Donald Trump." This kind of tsunami for Clinton explains one of the major reasons for today's decline. It's self-fulfilling. If business people don't trust Trump with their dollars why would we trust Trump with their stocks. Aren't they just representatives of their stocks? If they aren't giving to Trump doesn't that mean we should sell stocks until we see who wins?

You know what? There is something compelling about this logic.

Except for one big factor, again quoting the Journal: Most CEOs "have stayed on the sidelines, with 89 of the 100 top CEOs not supporting either presidential nominee and 11 backing Democratic nominee Hillary Clinton."

So, in other words, the CEOs aren't pro-Hillary. With 11 exceptions they are pro-nobody.

I believe those who give to Clinton are either people who think that she is "reasonable" and will take their calls, or because of positions on social issues that they find so untenable that they are giving to her.

It's easy to see why. As the Journal notes, while GE (GE) CEO Jeff Immelt hasn't yet declared who he will vote for, he did tell Vanity Fair that he can't reconcile Trumps views with "anything I believe in or that I think the country stands for or that the company stands for."

Now, let's step away from the CEOs and talk about the stocks themselves, not the companies and the people who run them.

I believe that with rare exceptions, stocks will not be nearly as impacted by the race as people think, although TheStreet has put together stock portfolios that should gain depending upon the candidate's success. I don't think it is as easy to pick winners because we simply don't live in a world where the president is so powerful that he or she can change the course of business.

I say this because if you go eight years ago, the nation elected a Democratic president widely perceived to be very left wing and anti-business and with him came a change of control of both the Senate and the House.

Since that time both houses of Congress went Republican, but I think the most salient fact about President Obama's presidency from "Mad Money's" point of view is that the Dow was at about 7,500 when the president was elected and now it's a little more than 18,000.

Now things are so politicized in this country these days that even pointing out that statistic is regarded as heresy. Republicans will say he has nothing to do with the run. Democrats don't seem to ever talk about move in the averages, I think in large part because they have often tried to distance themselves from the stock market. It's almost as if the Democrats are embarrassed that the stock market has rallied as much as it has because it is viewed as the playground of the rich. They seem to regard it as a curious byproduct of Obama's policies, a sad oddity that the rich got richer during his presidency.

Now, I am not saying that the market went up because of Obama. That would be just plain foolhardy. But I am also not saying that the market went up in spite of Obama.

The market went up because of an ideal combination of corporate profits, takeovers, low interest rates, buybacks and dividends. The market went up because the U.S. economy did get better. The market went up because more jobs were created whether you think that Obama had a hand in that or not. The market went higher because stock yields offered a more attractive alternative than bonds.

Now, we have a lot of unknowns with Trump. He hasn't really fleshed out his economic policy beyond a desire to protect our businesses from foreigners in one way or another. He's pro coal and pro-gun. But in every case except for guns, I would say that neither President Trump nor any other president can do all that much about foreign trade. He can't repeal NAFTA all by himself. He can't bring back coal all by himself. He can't shut down China all by himself. He can't stop jobs from going to Mexico all by himself. He will need Congress and if Congress either stays the way it is or goes Democratic while he wins, I am forecasting no real substantive change, save buying Smith & Wesson (SWHC) because Obama has pioneered the idea of executive control over gun control and I suspect Trump could do the same. Smith & Wesson's down a couple today on losing an army handgun contract, so it might actually be, literally, an opportunity.

How about Clinton? I think she might be equally ineffectual without a sweep. She can push for higher taxes for all sorts of income and capital gains as she has indicated. But unless you think both houses of Congress are going to go Democratic -- a far more important issue than who wins the White House -- there's not a lot to invest in either.

Now let's circle back to the 11 CEOs who have given to the Hillary camp and discuss the difference between Clinton and President Obama. Clinton, by virtue of her many years in politics, has built up a huge number of friends, both liberal and pragmatic, who know she will take their calls. Most of the CEOs I have talked to during the last eight years have been deeply frustrated because President Obama either didn't take their calls or they believe he didn't take them seriously. I know plenty of Republican and Democrat CEOs who tell me that Clinton's the opposite. In the crazy year since this campaign really took off, I have only talked to one CEO of all the scores I talk to who is for Trump and has given him money. Other than that one CEO, I haven't talked to anyone who thinks Trump would listen to him and act on his or her advice.

So, let's put it altogether in a short and sweet summary.

One, I don't think who wins the presidency, as radical as you may think the differences are, will ultimately mean as much as many people think it will for the stock market. That's because if you go back in time, I can't recall a moment where a president was more hated by business in my lifetime than when Obama took office and look how the averages did.

Second, the idea that Trump will be worse the wealth of shareholders is contrary to his views to date. We know Clinton wants to stick the rich with more taxes.

So, my conclusion ahead of the debate is that the selloff you are seeing is really about uncertainty, not about policy. If we knew specifics about Trump's policies instead of his proclivities and if we knew who was going to win the House and the Senate then maybe there would be more of a directional move. Right now, considering what most think it at stake, this volatility's pretty tame.

That's why I say stay the course. Uncertainty creates selloffs, but it creates bargains and given how little the president has to do with the performance of individual companies, if we get a big enough decline, we'll be able to pounce on the unaffected opportunities -- meaning the great majority of stocks -- and be able to get some presidential-related bargains provided we stay unemotional and remember the stock market history of an administration widely reviled by business people who ended up making fortunes with their stocks anyway.

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