Pay to Play
This comes from Jim Pethokoukis, who adds:
In 2009, Strategas Group realized there was going to be a lot more government intervention into the economy, and stocks of companies that exhibited “the greatest lobbying intensity” might outperform the broad market. So the firm created a 50-stock “lobbying index.”
As the above chart shows, they have done just that with the index outperforming the S&P 500 by more than eight percentage points over the past five years. “This consistent outperformance suggests that investors do not fully incorporate the value of company lobbying activities,” the firm concludes.
When companies make money by pleasing government instead of their customers, their customers lose. And government, greedy beast that it is, likes it that way.
I remember in the mid-'90s, Microsoft was justifiably proud of the fact that it spent almost nothing, zilch, on Washington lobbying. Was it a coincidence then that the Justice Department came after the company with both barrels blazing?
And is it yet another coincidence that since settling with Justice, Microsoft has become a timid player unable to compete profitably in new markets?
You make the call.
Article printed from VodkaPundit: http://pjmedia.com/vodkapundit
URL to article: http://pjmedia.com/vodkapundit/2013/5/16/pay-to-play-3