January Charts of Interest: Presidential Stock Market Scorecard

Barry J from TX posted over 1 year ago:

Just call me Alice. Topic #1 on how stock market has performed under past presidents lead me down the rabbit hole and on a serpentine search of the AAII article database. I drank from the vial. I ate the cake. I started humming some Grace Slick. And I met some very strange characters with cryptic thoughts. One said, “it’s the economy stupid.” Another said, it’s Fed policy. Another proposed it’s the electorate’s job status on election day. The one that made me smile (from 2020) said It’s the weakness of the opponent that determines the election outcomes. Another was convinced that there is YOY variance. And – surprise -- all of them had their own model that spewed data that supported their opinions. Image that. What I learned was if you select and define your variables carefully, torture the data long enough, and set a low enough p-value, you will get an answer that “is significant” enough to meet your “get published” mandate and might lead to an AAII interview. A very similar process to being elected POTUS.

Charles Rotblut from US-0-IL posted over 1 year ago:

Barry, no comment about the bourbon? :) I included the table about the market's performance under each president simply because I found it interesting.

-Charles

Barry J from TX posted over 1 year ago:

Charles, #1 I passed on a comment on that chart (imagine that) because the numbers seemed unrealistic. The returns are 4 years added together. #2 What would be interesting (to me) would be the PERCENT TREND BY YEAR over EACH of the 4 years in office. #3 This would make it possible to COMPARE how well each POTUS did with what they inherited in Y0 and how well they delivered on platform promises by Y4. The chart provided has potential. It just needs a few more columns. #5 I remember a similar chart in Jeremy Seigel's "Stock for the Long Run "(2017) that had additional columns listing "significant factors" during each term. #6 I would add the columns for each of the 5 "STEEP" factors used at Harvard Business School for over 80 years (first by Alfred Chandler since 1962 and later after 1980 by Mike Porter until he retired) to paint a "chalk outline" of the zeitgeist of the times: S = [S]ocietal (I'd use Stauss-Howe generation markers and generational events); T = [T]echnologies (dominant trends, major innovations); E = [E]conomic (Macro: GDP growth, Fiscal policy (total Federal budgets and total debt growth), Monetary policy (FFR or interest rate changes); E = [E]nvironmental factors (natural disasters, temp change); and, P = [P]olitical events (wars, allies, alliances, adversaries, major events in significant countries). #7 Chalie Munger said that the people with better models know more and usually prevail. #8 Carson only provided one vector - total market change; I found it to be a very "limited" model for comparing performance. A more appropriate model to MAP and COMPARE CHANGE is matrix algebra. We need some eigenvalues (magnitudes) and an eigenvector (direction) to understand how each POTUS managed the changes he encountered "on his watch along the watchtower." Then we can rank 'em AND thank 'em OR spank 'em as appropriate. #9 Charles, likewise. No spirits were consumed during this comment, but 5 as PM nears, there is a cabernet somewhere nearby whispering my name. Cheers.

Andrew from NM posted over 1 year ago:

I'm glad to see whiskey consumption is down. Now maybe prices will start to follow. And hopefully wine prices, as well.