Friday, October 09, 2009

Presidential Pricing

Surprise, surprise! President Barack Obama is awarded the Nobel Peace Prize by the Norwegian Nobel Committee for “his extraordinary efforts to strengthen international diplomacy and cooperation between peoples.” Congratulations, Mr. President!

First let me say that I voted for Obama thinking Washington, DC needed a good flushing out that only a change in political parties could achieve. Of course, I was well aware that would also open the door for new “featherers-of-their-own-nests” to set up housekeeping. The signal of universal disgust had to be sent somehow.

Yet, I have to wonder how a man who has only been in office for nine months could have accomplished enough to even be considered for such a highly respected award. Consider the lengthy histories of those who have received the award in the past - Mahatma Ghandi, Martin Luther King, Mother Theresa, former President Jimmy Carter. The list goes on and none of these recipients were so fresh to the scene as Obama.

Perhaps the Nobel Committee from its board room in Europe can see something that the rest of us cannot. I am willing to accept their wisdom this time. In this I admit ulterior motives (which also help explain why today’s post is actually relevant to the world of investing and not just politics).

If international diplomacy and cooperation really has been elevated, then valuation discounts for geopolitical risk should contract. This means stocks in some markets considered questionable because of political instability should theoretically be oversold. This creates a buying opportunity for “world oriented” investors.

I am sensing your doubt and skepticism through cyberspace. I am perplexed as you. Apparently, the Nobel Committee did not get the news feeds on suicide bombers in Pakistan or continued chaos in Afghanistan that has led U.S. commanders to ask for more troops from the very man who has been given the world’s most prestigious recognition for bringing about peace.

No comments: