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Bulls & Bears
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Pat Dorsey, Morningstar.com director of stock research; Tobin Smith, ChangeWave Research editor; Scott Bleier, HybridInvestors.com president; Danielle Hughes, Divine Capital Markets president, and Laura Schwartz, White House Strategies principal.
Trading Pit: Dems' Broken Gas Price Promise?
Democrats hit the campaign trail promising to ease the pain at the pump. But the day they took control of Congress, the national average was $2.32 a gallon. Now: a gallon of unleaded will set you back $2.70. That's a 14-percent spike in three short months.
Gary B.: Democrats would try to repeal the law of gravity! They tried to go after supply and demand with the gas prices, but that didn't work. What are they going to try next? As much as the Democrats want to control everything, they can't control basic supply and demand, and that's what's driving up gas prices.
Laura: This Congress, in their first hundred hours, passed the first real energy reform in the last six years. Hopefully the Senate will take it up this spring and send it to the President's desk. The Democrats have only been in power ninety-days and things like this take time. When was the last time a company was turned around in ninety days? The Democrats are committed and you're going to see it.
Tobin: If we had a real energy bill, it would be real simple and would focus on more drilling, more refineries, and more conservation -- unlike the Democrats complicated eight hundred plus page bill. Democrats want to raise the standard of gas mileage on cars. But they can't have it both ways. With all the environmental laws and withholdings, we're going to have twenty-two grades of gasoline.
Danielle: It's all about perceived supply and demand. This is how oil and gas prices are determined. The solution could be as simple as ending our hostilities in the Middle East, changing the way automakers build cars, and having incentives to buy hybrid cars.
Pat: What we need to do is build more refineries and consume less gas. One would be the supply side one would be demand side. That's all there is to it.
Scott: The Democrats' promise is bogus and can't be done! The Middle East is the cause of our problems. They simply talk and oil prices go up. Refineries lack of progress is what's causing gas prices to rise. And that will continue forever unless there are more refineries.
Better Investment: Stocks or a Presidential Campaign?
The leading presidential hopefuls have raised well over $100 million in the first three months of this year. But is donating to a campaign a good investment for your hard-earned money?
Tobin: If you're one of the top 100 donors, you get the Lincoln Bedroom. But if you're not a top donor, the marketing machine of either the Republican or Democrats releases its furry upon you with phone call after phone call. Save your money. I'd even rather put it in a mutual fund!
Scott: An investment in the president is a better investment than taking that money and putting it in stocks. The president can dictate policies that can create trillions dollar of wealth for the worldwide economy. But there is a flipside. Especially if someone gets elected that stymies the world economies. It's a risk just like any other investment.
Gary B.: If you're a large corporation and the president can directly influence policies, it may be a good investment. Otherwise, take your money and put it in the stock market.
Laura: Every four years we have a chance to invest in the future. It doesn't matter if you're Democrat, Republican, or indifferent. Let's say you want the candidate who is for stem-cell research because you have someone in your family with an illness that can be cured. You can donate to that candidate who could help create more science, more industry, more jobs, all of which goes back into the economy. It's a two-for-one and a great opportunity.
Danielle: The whole system is broken. The guys that give the big money are the ones that have political influence and are the ones that could whisper in the President's ear to have some kind of "help" with their business. Everyone else is going to get an annoying phone call or e-mail. It really pays to put your money in the market. Even with a market moving up and down, if you're in stocks, you'll make some money.
Pat: Stocks are better. Unless you're wealthy enough to "buy" some influence in a local politician or congressman and have some pork steered your way, a politician is not a good investment. And not many of us have the money to "buy" a congressman.