No Whiners Allowed

The election is over and the United States has a new president, Barack Obama. And if you follow the punditocracy on cable business TV, you might think it's the end of the world based on all the whining you've heard for the past few months.

Well, I say it's time to stop whining and start taking action to make your "Obama blues" go away. There are ways to capture a "Barack bounce" and make his plans -- like them or not -- pay off for you. Check out this week's Rant for more info, and don't miss the latest "Ask Toby" to find out if our economic troubles will derail green energy spending.

Toby

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Invest to Beat the Obama Blues

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I've got to say congrats to Obama. Nobody can deny that this guy has pulled off a miracle -- a broke sophomore senator outfights and raises more money than Hillary and breaks the Clinton machine.

Then he essentially invents his own Democratic party within the party and raises $500 million, mostly from the Internet in amounts of less than $200.

Obama truly is an American success story. It doesn't matter whether you're a Republican or a Democrat, you've got to give him that one.

But now that the hoopla is over, let's get back to what's important: How are we going to make money from this massive change?

At ChangeWave Investing, we're all about change, and this is about as big a change as you can get.

I think that the market has clearly given us a tradeable bottom here.

The market has priced in a ton of bad news already. And if we can shake off the 200,000 job loss report and 6.5% unemployment rate that I expect we'll get on Friday, there can be no clearer sign that we now have a mini bull market rally that could take us 10% higher before the underlying reality of a steep recession hits the market in early January.

What Lies Ahead

Here's what we can expect to see in 2009:

1. An auto industry bailout.

2. A move to a 7.5% to 8% unemployment rate.

3. The implosion of the private equity leveraged loans.

4. A rise in long-term Treasuries as the Treasury borrows more than $1 trillion from the world.

5. Another $200 billion to $400 billion in credit card and high-yield bond defaults.

6. A strong contraction in U.S. and world GDP. Expect a negative 3% U.S. GDP at the trough in the first quarter of 2009.

This is scary stuff, but remember that we want to be buying stocks when the news is bad -- but not getting any worse.

We will get through this recession just like we have every one before it. And let's not forget about the $3.1 trillion in economic stimulus from the government.

Believe it or not, our economy will be stronger coming out of this rough patch because it will be built on a much-sturdier base than it was when 27% of all S&P 500 (SPX) earnings came from unsustainable financial services.

6 Investable Trends

A number of things are clear going forward:

1. Economic Stimulus for Infrastructure

The next Congress is obviously going to pass a huge economic stimulus infrastructure building scheme, possibly in the $200 billion to $300 billion range.

Like it or not, fiscal stimulus is what works in a recession. We borrow money when times are bad and pay it back when times are good -- and those good times will come.

The winners here include everyone from asphalt makers to big infrastructure builders like Chicago Bridge & Iron Company (CBI).

2. Immortal Banks

The Fed and the Treasury Department have created a set of "immortal banks" that are like vampires -- they cannot and will not die.

And with the Fed likely to lower rates again, a number of commercial banks are going to get a big boost in earnings power next year because of the high spread of yield over cost of funds.

3. Interest Rates Up, Dollar Down

Borrowing another trillion dollars from the world via U.S. Treasury bonds will raise long-term interest rates and reduce the value of the U.S. dollar after this mini bull run.

A lower dollar is great for energy and commodity prices, and for efficient exploration and production (E&P) companies.

I think we'll see oil bottom at $60-$65 per barrel, so you have a great opportunity to pick up E&P stocks at 70% less than the values they were selling at six months ago.

4. Higher Taxes

Higher dividend, capital gains and income taxes for the most successful earners in America are on their way. This will make tax-free income even more valuable to investors.

You should consider high-yield energy income trusts that pay out 85% of their dividends tax-free.

This trend should also have you looking at blown-up municipal bond closed-end funds.

5. Renewable Energy

Renewable energy has become the recovery industry of choice around the world. 

6. Big Phrama is Going Down

Big Pharma, which has already been hurt by generics, will get clobbered by Obama's administration, so look to biotech platform companies.

At ChangeWave Investing, we already have a number of plays that will profit from these trends (get in now), and we're looking to add more. It's time to make hay while the sun shines.

I think we're in for a big "Barack bounce" that will give us a chance to make some nice profits before the really bad recession news hits the tape in the fourth quarter.

Take advantage of this temporary bounce to invest in the trends mentioned above. If you play your cards right, you could turn your 201(k) back into a 401(k).

The world is not ending, Republicans. We're going to make money.

Toby

P.S. Whether you like him or not, Barack Obama will bring about some massive changes. Getting out in front of those changes with the right names will give you a chance to rebuild your 401(k). Find out how we're profiting from these trends at ChangeWave Investing with your 90-day, risk-free trial subscription.

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Ask Toby: Will the Recession Affect Green Energy Spending?

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In today's video, Toby discusses the future of alternative energy with a more eco-friendly government in place.

Get Your Free Front-Row Seats Now

If you're not planning to attend the D.C. Money Show, you can still get front-row seats to two great sessions in the comfort of your home.

What's the Next Megatrend? -- Friday, Nov. 7, at 5:45 p.m. Eastern

Watch this webcast to learn how to put money on the winning side of change. Byran Perry, Michael Shulman and Jon Najarian will tell you what stocks and trades they like now, and how you can profit in this market.

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Shorting the Credit Crisis -- Saturday, Nov. 8, at 11:45 a.m. Eastern

This is one session you won't want to miss. Michael Shulman will tell you how you can make big profits from the current credit crisis. Learn to use simple put options to reduce your risk while increasing your profits. 

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Watch 'Bulls & Bears' on Fox News

Be sure to tune in to Fox News Channel this weekend and join Toby and the crew on "Bulls & Bears" for their weekly market roundtable as they kick off the Fox News Channel business block on Saturday, Nov. 8, at 10 a.m. Eastern. ("Bulls & Bears" replays at 4 p.m. Eastern, Sunday, Nov. 9, and 4 a.m. Eastern, Monday, Nov. 10.) Or you can catch the show Saturday evenings at 6 p.m. Eastern on the Fox Business Network.