So Scott Brown (R) has won the Massachusetts senate seat vacated by the late Ted Kennedy.   I have not made my views of this particular election known for a reason, mostly because I’d like to be able to talk about its effect on the market from a neutral position.  You all must know by now that I am extremely socially liberal, but very economically conservative.  Never the less, that doesn’t have anything to do with how this election will effect the market or the election’s implications on future legislation in the congress.

Here’s the shakedown.  I was taught a long time ago that the market can handle good news, it can handle bad news, but the market hates indecision.  Market participants tend to shoot first and ask questions later when they don’t have a reliable set of data upon which they are able to make decisions.  Why invest in something you don’t have confidence in.  I believe over the past few months we have seen a rally in the healthcare sector, which has outperformed the broader market, primarily because large investors had a reliable set of new rules on which to invest in healthcare companies.  I don’t care what your view is on whether the healthcare bill is good or bad, really, I could care less, all I’m worried about is what the market thinks.  It’s pretty obvious to me that major players came off the sidelines in healthcare a few months ago and started buying.  The why to that questions is up for debate, but I believe it is primarily the result of big players understanding the new rules, whether they are good or bad for the companies.  Now, you would think this healthcare bill would be an albatross around the neck of most major healthcare companies, but the market obviously is not viewing it that way.  Why, I have no clue, and I really don’t care to pontificate on it, it’s a waste of time.  We need not know why the market does what it does, just what it’s doing.

So now we move to the present, where the healthcare bill is in question of being passed.  Many pundits, namely Jim Cramer, have remarked that a win by Scott Brown would lead to a rally in healthcare.  I profoundly disagree.  Remember the market hates not knowing the rules.  I’m not saying they are going to sell healthcare stocks off on the news, I’m saying that we aren’t going to see out performance in healthcare until some clarity is given as to whether the healthcare bill is going to be passed, and what will be in it.

I implore you all to put your political and social views to the side when considering the market.  I see way too many people doing this, and it makes me sick.  I don’t care if you’re democrat or republican, for or against the healthcare bill, just understand simply, the market does not like it when the rules of the game are not clear, you only need to look back to early 2009 when the bank bailout was in question and no one knew what the rules were going to be, it’s pretty obvious what happened then.