Another Republican Golden Shower
❝ The other day, President Donald Trump shared a few thoughts about the stock market.
Like so many of the president’s statements, this one is objectively false. Our charge today is to set aside the political debate, and instead use his statement as an opportunity to explore ways to compare markets and rallies…
❝ No. 1. U.S. Presidential Rallies: As Bloomberg News reported the other day, “the ‘unprecedented’ stock market rally since his election right now isn’t big enough to crack the top five in presidential history.” As the accompanying chart shows, the Standard & Poor’s 500 Index has gained 19 percent since the 2016 election. That rates better than three other post-presidential elections: George W. Bush in 2004 (7 percent), Bill Clinton in 1992 (10 percent), and Barack Obama in 2012 (16 percent).
❝ …The Trump rally clocks in at No. 7. While that is pretty good — remember that markets fell after some presidents won election — it is hardly unprecedented.
Just as an aside — I am on record as reminding people that all presidents get too much credit when things go right and too much blame when they go wrong. Using market performance as a basis of presidential prestige or lack thereof is the refuge of partisan hacks and scoundrels.
❝ No. 2. Global Rallies: As we have discussed before, looking at a market rally in the U.S. while ignoring gains overseas is a foolish approach to performance analysis…
❝ The president seems to be naïvely making absolute performance claims while ignoring the data on relative performance. Imagine a mutual fund or hedge fund manager making similar claims. The disciplinary fines would be enormous.
Either way, the investing public deserves better.
RTFA for a bit more detail and illustration from Barry Ritholtz. No matter, market gains since Election Day simply have been nothing out of the ordinary.
Trump, as usual, lies like a rug. The fake news comes from a fake president.