The Best Stock-Picking Strategy

Here's a stock picking strategy: invest in the stocks of companies that donate to the winning Presidential candidate. Research shows stocks of the winning candidate's biggest corporate donors get a post-election boost.

That's according to smart money dot com.

Now whether that price gain is due to the companies gaining clout due to the companies' contributions or that companies pick candidates with their best interests at heart or whether its just serendipity who knows.

But these stocks go up.

Case in point: Goldman Sachs.           

The Wall Street investment bank's executives and workers gave Obama $1 billion in 2008 and it's stock went up 102% in 2009.

Other big time Obama contributors had stock price rises as well- though not as much as Goldman.

Microsoft, Google and Time Warner outperformed the S&P 500 by an average of 18% in 2009- and in each case, employee’s contributions favored Obama.

Clearly building a portfolio based exclusively on  top contributors would be a mistake, but there is no doubt some companies are better poised to benefit from one candidate's policies over others.

Health care insurers, for example, have faired well under Obama. Also, health care companies overall contributed heavily to the President in this cycle spending $9 million versus $6 million given to Romney.

As we've said many times on this network, banks have switched their loyalties from Obama (who they gave heavily to in 2008) to Romney.         

Here are the top donors and their contributors to each candidate:

Obama’s Top 5

Microsoft Corp. $443,748

Google Inc. $357,382

Comcast Corp. $235,037

Time Warner $230,088

IBM Corp. $147,271

Romney’s Top 5

Goldman Sachs $676,080

JP Morgan Chase $522,799

Morgan Stanley $518,897

Bank of America $510,728

Credit Suisse Group $427,560

Of course, the smartest corporate donors usually hedge their bets by giving money to each candidate- that way they are on the winning side no matter what happens