Exhibit A

I have often warned against making investment decisions based upon political commitments, and I am hardly alone. A wonderful/dreadful example is provided by Stephen Moore, who announced this week that he is leaving The Wall Street Journal to become Chief Economist for the Heritage Foundation. Quite obviously, Moore opposes the policies of President Obama vociferously (“Everything he’s done has been such a massive failure…”).

That is his right, of course, and I take pains to keep Above the Market away from politics as much as possible. My point is that Moore’s political commitments foolishly override more objective analysis and thus impact his economic and investment outlooks negatively.

Back in 2010, Moore called for a truly dismal set of investment and economic outcomes because — of course — Barack Obama was in charge. These included higher interest rates (which didn’t arrive until 2013), higher inflation (still not happening) and gold at $2,000 an ounce (currently in the range of $1,250). He even called for a further rise in the unemployment rate from the then-current 9.6 percent on account of the repeal of the Bush tax rates (the current unemployment rate is 6.7 percent). Especially in retrospect, it appears obvious that Moore’s forecast was based more upon his political hopes and dreams than upon economic and market realities.

To be clear, this problem isn’t limited to Moore and those who agree with him. We’re all prone to seeing things through an ideological lens. But if you want to be a successful investor, you’d be wise to avoid it — to the extent you can. Politics and investing simply don’t mix.

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