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Donald and Hillary, meet EDGAR

November 3, 2016

With so much riding on Tuesday’s presidential election, it isn’t surprising that Donald Trump and Hillary Clinton are popping up in public companies’ SEC filings—especially when those companies perceive that they stand to gain or lose by the election of one candidate or the other.

Often these preferenclintonces run along predictable lines. For example, the CEO of firearms manufacturer Sturm Ruger & Co., in an Earnings Transcript included in a recent 8-K, registers his unease with Clinton’s views on guns (while also acknowledging that her election would likely have the effect of increasing demand for firearms). On the other hand, Guinness Atkinson Funds, with heavy investments in alternative forms of energy, sees a boon “[i]f Hillary Clinton wins the presidential elections in the United States and follows through with her campaign promise” to increase reliance on solar energy (Form N-CSR, 9/8/2016).  Similarly, American Growth Fund Inc., with investments in medical marijuana, is positively disposed toward a Clinton presidency, but isn’t so sure about her rival: “Donald Trump shifts back and forth on marijuana legalization. Early in the campaign he was open to letting states do what they wanted, then hetrump reversed course and took a stand against legalizing marijuana. Now he says he is 100% for medical marijuana, even though that contradicts the Republican platform” (Form N-CSR, 9/8/2016).

Some companies and funds express concern about what the mood for change —  as exemplified by the support for Trump and the recent Brexit vote — might portend for markets.  For instance, as Mutual of American Institutional Funds Inc. observes in a recent Certified Shareholder Report, “the U.S. presidential bid by Donald Trump is based on . . . populist themes, including anti-immigration and anti-globalization. The entire Western world seems to be in the throes of an anti-establishment mood, suggesting that the world order developed over decades may be in for change. The nature of change is uncertainty, and . . . markets do not like uncertainty.”  The perspective of AlphaMark Investment Trust, as communicated in a letter to shareholders, is at once less pessimistic and more cynical:

Our view concerning the election is neutral. If Donald Trump wins the election, it is our opinion that without backing in the U.S. Congress, his plans for making real change will fail. In essence, he has shot himself in the foot with his constant berating of anyone opposed to his ideas. If Hillary Clinton is elected, we also do not see much change happening and more of the status quo. Our opinion is: a Trump win means short term volatility and a Clinton win means longer term slower growth.

Finally, Genius Brands International, a kid-focused entertainment company, is similarly neutral in stance but contrastingly upbeat in tone.  “The business of making animated cartoons won’t be affected whether Hillary Clinton or Donald Trump is elected our next President. Changes in technology or new distribution systems only enrich the intrinsic value of animated cartoons. Strong cartoon characters don’t go obsolete and are not diminished by innovation. In fact, they are enhanced by it” (Form 8-K, 6/30/16).  If cartoons and other forms of escapist entertainment hold a mirror to life, we can only assume that they too are enhanced (and contorted) by the surreal, stranger-than-fiction, circus-like spectacle that is the 2016 Presidential election.  In any case, we’ll all be ready for a cartoon break when the election is finally over.

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