No, I don’t know how the elections next month are going to turn out.
But when it comes to the stock market, here’s a tip: bet on the incumbents.
That’s because today’s economic environment is particularly hospitable to “incumbents” — established, large companies — and hostile to upstarts.
At least, that’s what the capital markets are indicating.
So, “mega-cap” corporations with already strong balance sheets — think, Microsoft, McDonalds, Johnson & Johnson, Pepsi, etc. — are able to borrow billions at infinitesimal interest rates.
Meanwhile, smaller companies apparently are still finding themselves on the outside of a “credit drought.”