Obama selloff in November?

says Tobin Smith.

If Barack Obama is leading by 10 points over John McCain going into November, I guarantee you that you’re going to have a sell-off purely for locking in capital gains. I mean, Obama said he wants to go to 28%. Don’t fall for the trap that Obama really thinks he’s going to become president of the United States on a platform. Right now, everybody is pimping for John Edwards’ delegates— they need 235 delegates from Edwards. So right now, Obama sounds like he’s a socialist. You have to assume that when that’s done, whenever Obama is the one who’s the leader in the clubhouse—because Edwards hates Hillary Clinton—once he gets the delegates, then you’ll see that rhetoric move back to the middle.

Alternative energy is going to kick ass. The other thing is you’re going to assume that the Fed is going to be at 2% to 2.25%, which means that financials will do well as soon as they make the turn. And the turn is that you will have clarity on Citibank and the real big guys, we’ll have real transparency. We still do not have transparency.

EQUITIES: Is there one rule of thumb regarding investing?

Smith: You have to understand that there’s no free lunch. If you want a bond rate of return, then buy the bond. If you’re looking for superior return, you have to come to grips with the idea that you’re getting paid extra because you’re willing to ride out the bumps in the road. Many times, investors sort of miss that part.Usually, themost powerful psychological ingredient is the fear of not being greedy enough. The other part is that it’s not profitable, nor is it prudent, to always own growth stocks. The thing about an S-curve change that nobody realizes is, if something’s growing rapidly, it’s also getting to satiation rapidly. If it’s slow growth, it’s going to take a long time.

[roundabout link via Mauldin, who is now appearing in Equities Magazine]