Tuesday, August 12, 2008
Democrats can't pick stocks
Warren Buffett notwithstanding, you ought to prefer, on average, that your money be managed by Republicans rather than Democrats (abstract here). At least if you care about maximizing your returns.
The interesting question is whether there is any cause and effect or merely association. Are Democrats worse at picking stocks because they believe the things that Democrats believe? Or do they believe the things that Democrats believe -- you know, that life is an unfair shooting of the craps and therefore risk should be minimized and socialized -- because they are not so good at picking stocks? I'm not sure which explanation would be more troubling.
4 Comments:
By 
, at
Tue Aug 12, 01:17:00 PM:
Interesting question TH. My guess is that their ideology gets set aside when it comes to making money. George Soros seems to do pretty well, as does Buffet. I have also noticed left-leaning entrepeneurs that don't run their businesses at all like the political views they espouse. It's called hypocrisy, or do as I say, not as I do. The Left excels at it. My two cents worth.
By 
Andrew Hofer, at
Tue Aug 12, 03:15:00 PM:
Or because investors understand that government involvement in commerce is usually a bad thing.
Unfortunately, I suspect this correlation will go into decline, since republicans seem as interested in getting involved in commerce as Democrats these days.
By Cardinalpark, at
Tue Aug 12, 05:41:00 PM:
Feeble - to be clear, George Soros has never made a dime trading stocks. Mostly he's gotten carried out with stocks, either shorting things like Amazon when they were going orbital, or selling Cisco way way way way too soon.
Soros has made the mast majority of his hedge fund profits utilizing a global macro investment strategy focused on trading currencies anf fixed income. He further amplified his profits by being a market maker in his hedge fund, providing liquidity for investors at discounts to NAV and selling at premia.
By , at
Tue Aug 12, 06:52:00 PM:
After that lengthy, but worthy listing of the NYC music scene, this post is probably doomed to obscurity, but here goes....
Buffett is a capitalist in deed, but a socialist in thought and word. There are many of these; Soros is mentioned above. So what is up here? My take: These peoople like capitalism since it empowers them as individuals, but they don't worship at the feet of free markets. If you need any proof, witness the deal between Buffett and Gates to evade U.S. taxes on a mutual trust they formed. Legal, yes. But contrary to their stated desires of socialist beliefs. Yes.
Are these, then, hypocrites? Of course.
