The Chicago Tribune takes a look at the stock market acumen of Barack Hussein Obama.
...The investments that stirred concern involve two speculative stocks with business interests influenced by the government: AVI Biopharma, a biotech company, and SkyTerra, a satellite communications company. The transactions were first examined by the Web site thestreet.com and The New York Times later disclosed the involvement of Obama campaign contributors in the companies.The rest of the story
AVI was developing a drug to fight avian flu and two weeks after Obama purchased the stock he introduced legislation to increase funding to combat the virus, which was spreading in Asia at the time. SkyTerra received government permission to build a national wireless network on the day Obama purchased his shares.
Obama has said he was not involved in selecting the stocks and said they were held through a "quasi-blind trust." His staff has stressed that the trust, which invested only in the two stocks, suffered an overall net loss of $13,000, even though Obama made a 28 percent profit on his investment in AVI.
Still, the selection of two small-capitalization, speculative stocks is peculiar given the investment instructions provided by the legal document establishing the trust, which Obama named the Freedom Trust.
An attachment to the trust document describes the risk profile as "moderately conservative," with an investor willing to accept "some year-to-year volatility consistent with long-term equity trends." But placing all of the trust's assets in two stocks in small companies is a much more aggressive investment strategy likely to feature more volatile returns than overall stock market trends. Indeed, AVI soared, and SkyTerra surged before plunging.
"There is nothing moderately conservative about that portfolio. It is speculative," said William Reichenstein, a Baylor professor of investments.
Stephen Horan, head of private wealth at the Chartered Financial Analysts Institute, a standard-setting organization for investment professionals, said the risk profile described in the trust document suggests an emphasis on large-capitalization stocks.
"That tells me you're going to have substantial exposure to blue-chip, large-capitalization stocks. That's how you capture the moderately conservative part of that," Horan said.
The stock selection is more consistent with the after-the-fact explanation that Obama offered when he spoke to reporters this week: that he wanted to make "aggressive" investments with his $100,000.
The purchase of the stocks, in February 2005, also came months before establishment of the trust, on May 31, 2005.
Campaign spokesman Bill Burton said Obama was "in the process" of establishing the trust when he instructed a broker to begin purchasing stocks with the money he had set aside.
That explanation raises questions about why Obama rushed ahead with stock purchases rather than waiting to establish the trust, since the trust's purpose was to remove potential for an appearance of a conflict of interest in choosing investments.