The 1992 presidential race has Wall Street talking to itself. It despises uncertainty. Yet it has received a heaping helping of it in the form of the ever-surprising Ross Perot, who has turned the election into a three-way contest.
While the investment world may grumble about President Bush's lack of a clear-cut economic plan and decry Gov. Bill Clinton's ties to old-line Democratic taxing policies, it isn't singing the praises of Mr. Perot. His plans for the economy may not yet be known, but he already is well known to Wall Street veterans. You see, he's been there before.
"Ross Perot came to Wall Street in the early 1970s to take over the troubled F.I. DuPont brokerage firm, a well-known businessman . . . who offered a lot of promise and said he'd take action," recalls A. Marshall Acuff, portfolio strategist for Smith Barney, Harris Upham & Co. "It went under and he lost millions."
Not that failure is unforgivable. Mr. Perot has been successful in other business ventures. But Mr. Acuff detects similarities between the initial boasts in Mr. Perot's leap into politics and that jump into the investment world.
"I'd say Wall Street's general feeling is that Perot might not be bad for the United States, but it hopes that Bush pulls himself together," Mr. Acuff said.
Wall Street perceptions of a Perot presidency are, like the candidate's stands, not exactly clear-cut. He has, for example, said he wouldn't raise taxes except in an emergency, and then only with some advance clearance from the American people. Not everyone's buying it.
"The stock market would likely take an immediate nose dive if Perot were elected, since it will determine that he is a social-spending Democrat . . . who is willing to raise taxes on the well-to-do," predicted Ethan Siegal, a fiscal and political analyst with Prudential Securities. "I don't believe that health care would be on the front burner with Perot, but he would spend a lot of money for education and job training."
Because a Perot election would be a dramatic statement by the electorate, he'd be given a grace period. But eventually, Mr. Siegal believes, the honeymoon would be over and Mr. Perot would have to work more closely with one of the parties, probably the Democrats.
"While Perot has business expertise, it's not . . . clear that he would be good for business and investment," said Lincoln Anderson, economist with Fidelity Investments. "His position on taxes is still unclear and he pretends to be a trade protectionist, which is not necessarily good for American business in the long run."
"One thinks of Perot as a classic business president, who wishes to balance the budget, cut fraud and abuse and exhibit a tougher outsider attitude toward government," said James Annable, chief economist with First Chicago Corp. "I see him as more comfortable with Republicans than Democrats.
His apparent ties to Republicans and Democrats keep the picture speculative, confounding Wall Street pundits.
According to Merrill Lynch chairman William Schreyer, "The markets dislike uncertainty above all else and, right now, the prospect of a Perot presidency would pose colossal uncertainty."
Wall Street, said Mr. Siegal, is finally paying attention to Mr. Perot because it realizes the confusion about the presidency may not be resolved before November. Since anyone might win a three-way race, Mr. Siegal believes Mr. Clinton also should be taken more seriously.
"Buy Perot, increase your position in Clinton and sell Bush," advises Mr. Siegal, who has put together a theoretical portfolio. "If I were a fund manager looking out through the third quarter, I would be 40 percent invested in Perot, 35 percent Clinton and 25 percent Bush."
Since last month, Mr. Perot has risen from 20 percent, Mr. Clinton from 30 percent and Mr. Bush has fallen from 40 percent.