That new angle came from nothing else than something that was staring us in our face at the time. That idea was to trade WITH Obama so to speak. Seriously do not fight the President or the Fed as they say. What we noticed was that our retirement assets that were in mega cap stocks such as technology, Wall Street firms, big banks, and those contributing to Obama's re-election were doing very very well. We had foolish up to then been thinking that the companies that Obama had been talking against from day one were actually the companies he was looking after via non enforced regulations and lax tax enforcement and they were doing very well financially. We have called this the political economy in several prior blog posts. In addition it was being aided by extremely low interest rates of the Federal Reserve which we have called financial engineering, profits being funneled into higher dividends and stock buyback's, of these same mega cap corporations. So we immediately moved almost all of our retirement assets into those stocks. In our trading account we targeted these same companies that obviously were in the sweet spot with Obama and Democrats. Essentially accepting that Elizabeth Warren is correct in the premise that big banks, big technology and such are winning big and taking advantage of the middle class. Of course what Ms. Warren fails to say is that her own party democrats are the ones in the pockets of big business.
Boom! In the two plus years since then our retirement assets have roared upward to our pleasure. Our trading has produced two losses. Yes two losses! Those two small losses which were carryover position trades from 2011 that we of course soon abandoned. Our trading pace has come down by about 50%, but we are making more money than before, with less risk, and less asset exposure. We will be increasing our asset exposure this year since this approach is working so well and we will be still be making more and working less. This Obama/Democrat new normal is frankly working very well for us personally. Thank you very much.
As we said the reason we are doing well trading and investing is doing it with Obama and democrats and their crony businesses practices. We currently trade big technology like Microsoft, Oracle, and Apple. We trade big banks like JP Morgan, Goldman Sachs, American Express, and Wells Fargo. We trade big insurance like Metropolitan and Prudential. We trade big telecom like Verizon and AT&T. You get the point. All these companies are Democratic lead and cozy with Obama and Democrats while contributing millions each election cycle to their campaign coffers.
We are investing and trading with the winners, movers, and shakers in this economy. Previously we assumed the economy was a free market one where the best run would succeed, but now it is the politically favored who win out in the market. Now as we have said for many postings here the rich get richer and the poor get poorer in this economy. The jobless well they remain jobless. Let's give one example of how this game works and that being the minimum wage. Big business like tech firms, banks and such could care less about minimum wage since almost all their employees are paid much higher wages. Walmart for example constantly is lampooned for paying people less is believe it or not actually is for a minimum wage increase. The reason is simple Walmart already pays about 98% of their workers above minimum wage and can spread any minimum wage increase across millions of annual transactions and their competitors in small business can not. So any increase in the minimum wage kills their competition which means more sales for Walmart. These people are not stupid and now neither are we.
Two other examples from just yesterday. Microsoft reported a slower quarter for earnings and their stock got sold down almost 10%. Not to worry all this means is the continuing profits from Microsoft will be used to buy back even more of the cheaper shares leaving us holding more valuable shares. Apple made record profits. Apple is likely to use the now $40 billion in free cash flow each quarter to increase their dividend and stock buyback making shareholders more wealthy.
Democrats are increasingly the rich party representing the really really rich corporations in the country and the Republicans represent more and more small business people who are getting screwed by Democrats who are in power right now. Almost all regulatory activity originates in the administrative branch of government which is the President. So they have control of who gets a pass on say an environmental rule and who does not. Apple contributes millions and they continue to import cheap phones where the producers pollute as they like, on the other hand the small tire dealer company on the corner does not contribute to Democrats and they get fined big time for oil spills. So if you want to make money in the current political environment you stay with those politically favored corporations and avoid those not so.
Therefore considering that we now make more money, work less, with less risk the obvious thought is to continue with this new new normal by supporting and voting for those who have our back such as Hillary Clinton. Hillary is like Obama cozy with big banks and big corporations who will be supporting her run for election with large donations. Yes electing Hillary Clinton as President in 2016 screws young workers, make life hard for the decreasing number of small businesses, and further widens the wealth and generational gap. But who cares we, like our new Democratic big business friends, are doing darn well. Our time here is limited to at most a couple more decades and life on the warm water beach, eating at fine dining establishments, and driving another new Mercedes seems like a fair deal to us for young folks to pay since they already have voted to do this to themselves anyway, TWICE!
So we are highly considering supporting Hillary Clinton in 2016 and any of those who on either side who continue to support the status quo. What would you do in a similar situation?
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