Sooooo...Does Politics Really Matter?That is a great querstion which faces investors especially in an election year and especially in the US due its dominant world position.
In the past, I have kept track of politics to determine whether there are implications for my asset allocation (stocks vs bonds; which sectors to overweight or underweight etc). That said, as a general rule my conclusions in the past are that politics played a minor role in asset allocation and that the general economic cycles and actions by the US Fed are more important determinants.
This time around though I have the feeling that the upcoming US election will be much more significant and especially so if the winning Party has control of both the Presidency and Congress.
Why is that you might ask?
Well this time around the election IMO is not so much Democrat vs Republican but rather Capitalism vs Marxism. This is a big difference in terms of where the economy goes in the future. In the case of Marxism (read Kamala Harris), if Harris wins then we will likely see 8 more years of a march towards Marxism and ultimately a very different world order. This bleak scenario however would be somewhat ameliorated if the Republicans retain at least the House since they would not approve many things Harris wants to do. The reason I say, ameliorated, as opposed to stopped is that under Trump, he used his powers of Executive Orders to do a great deal of things in many areas and particularly regulations and bypassed Congress. Biden starting in his first day of office by stopping keystone pipeline took a chapter out of Trump's playbook. No doubt Kamala would do the same and most likely expand on this theme until she is stopped by SCOTUS.
In the US, as many of you know, elections for president are not a simple decision in terms of who gets the most votes due to the Electoral College wrinkle. Right now when I look at the polls it is pretty close to a tossup as to who win Trump or Harris. Lots will depend on two things in the so=called swing states - voter enthusiasm and the ground game by each Party at the local level. When I look at it from this perspective, it would appear right now that Harris has the edge.
Sooooo...back to the original question - what does this mean for investors? And more imprtantly, what does it mean for investment in ENS?
The answer in part, as usual depends on your investment horizon and one's tolerance to risk.
On one side, there is no question in my mind that Harris/ marxism will make it even more difficult for anyone to build more pipelines and I am not talking about just mainline type pipelines but also feeder lines at the regional and local level. This places ENB in a wonderful position and especially with their recent natural gas ultilties acquistions and their previous purchase of the LNG port and associated pipelines in Texas. This is a clear long term advantage.
Offsetting this, however, is the fact that Harris will continue to do what Biden has done and that is to rapidly expand the US National Debt and this will at some point have negative consequence for investors. When this might happen is anybody's guess.
So on balance, from a strickly self interest investment point of view, with all this taken into consideration, I am quite happy to hold assets in my portfolio related to pipelines but would be careful in other areas of energy especially oil and to a lessor extent natural gas. And, as I have mentioned many times on the SU Board, I am looking at finding companies with solutions to problems that politicans create and encourage others to do the same. In the case of a Harris Administration, IMHO there will more opportunities in this regard than there would be under a Trump administration.