From Reagan to Trump: Here's how stocks performed under each president

Discussion in 'Economics' started by RedDuke, Aug 13, 2019.

  1. RedDuke


  2. dozu888


    6 data points are not statistically meaningful..

    by the way cnn is already a proven joke.... should stop reading their stuff... harmful for trading.
  3. DaveV


    Not only the stock market, but the entire economy, from GDP to Unemployment, tends to perform better under Democratic presidents. Since the early 1900's, every recession but one has happened under a Republican president. If Trump can hang on for 17 more months he will be the first Republican president in 100 years to not have a recession in his first term in office.
  4. RedDuke


    This is such an irony. But yes, too few data points for sure.
  5. krugman25


    Right.. and what was the relative valuation at the start of each presidency? Use something like CAPE ratio.

    It's not surprising to see big gains following a deep discount, and tepid gains after a lofty run up.
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  6. dozu888 likes this.
  7. krugman25


    Using CAPE ratio

    Reagan - 7
    Bush - 14
    Clinton - 18
    Bush #2 - 37
    Obama - 15
    Trump - 27

    Looks like Bush #2 and Trump inherited markets that would have had the lowest implied future 10 year returns.

    The 10 year mean of the CAPE has risen significantly over the decades. Using that metric, Clintons 18 was much more towards the high end of the historical mean compared to Obama's 15 which was near the low (prior to the 08' crash, a 15 hadn't been printed since 1989).

    Reagan's growth and Obama's growth are not surprising considering they entered office at the lower end of the mean at their point in time. Bush (#1)'s growth seems to match where valuations were at the time. Bush #2's growth (or lack thereof) is not surprising considering CAPE was astronomically high when he entered office. His term's market returns are in par with CAPE implied 10Y returns at that lofty height.

    The outlier's, or surprises to me are Clinton and Trump. Clinton entered office towards the high end of the mean and the market's churned out extremely impressive growth. Trump's term has a lot of time left, but as this point in time the market's growth considering the lofty level of CAPE is impressive. But it is not sustainable. Gravity always takes effect and the loftier things get the harder they fall.

    It seems the luckiest president's inherit a market in the dumps and don't have to try to blow up an already overfilled balloon.
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  8. tommcginnis


    As used to be said, here's "...the rest of the story."

    Cute to work around a bit. VERY small sample, statistically. As well (as has been pointed out above), there is a lot of serial correlation/causation here -- the latest being the election of Barack Obama and the subsequent market climb: Obama came in with a helluva mandate (read: "WON THE VOTE.") simply because the economy was in shambles. To conclude anything??? "Woof!" Very thin ice, statistically.

    As for Thrump? "Pffff!" There be NO ice; there be open water; there be no there there. (Excepting the Republican House/Republican Senate tax bill, which carries (pun likely unnoticed) its own burden, yet to be reckoned with.)

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  9. Overnight


    Paul Harvey, a brilliant story teller. I miss him.
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  10. MKTrader


    Obama had 7 years of ZIRP and massive amounts of QE. Give the Fed credit for that.

    Also, the consequences of policies can take years to unravel. Clinton followed 12 years of Republican's not as if he totally re-engineered the economy the first day. In fact, he was quite the moderate.

    There are also factors like the internet boom (totally outside any president's control--sorry Al Gore!)...or the industrial revolution many decades earlier.
    #10     Aug 13, 2019