Stock Market returns, Obama vs. Trump (so far) Spoiler: Obama still beating Trump

[swag]

Explanatory post:

https://www.calculatedriskblog.com/2019/12/by-request-and-just-for-fun-stock.html

"CR Note: I don't think the stock market is a great measure of policy performance, but some people do - and I'm having a little fun with them.

There are some observers who think the stock market is the key barometer of policy success. My view is there are many measures of success - and that the economy needs to work well for a majority of the people - not just stock investors.

However, for example, Treasury Secretary Steven Mnuchin was on CNBC on Feb 22, 2017, and was asked if the stock market rally was a vote of confidence in the new administration, he replied: "Absolutely, this is a mark-to-market business, and you see what the market thinks."

And Larry Kudlow wrote in 2007: A Stock Market Vote of Confidence for Bush: "I have long believed that stock markets are the best barometer of the health, wealth and security of a nation. And today's stock market message is an unmistakable vote of confidence for the president."

Note: Kudlow's comments were made a few months before the market started selling off in the Great Recession. For more on Kudlow, see: Larry Kudlow is usually wrong."

[empedocles]

1. Fine, telling chart

[onenote]

2. There is a reason this argument isn't iikely to persuade many people.

Simlple math.

Imagine you purchased 10 shares of stock at $10 per share and a year later the stock price has increased by $10 to $20 per share, a 100 percent increase. In year two, the stock price increases by $14 per share to $34. The increase in the stock price is only 70 percent in year 2 vs.the 100 percent increase in year one, but you gained $140 in year two v. $100 in year one.

Most people aren't going to think that they did better making $100 in year one than they did when they made $140 in year two.

(According to the article the gain in the S&P was 54% under Obama and 42% under Trump. Using those benchmarks, someone buying $100 in stock at the beginning of Obama's term would have gained $54 when Trump took office. From that point forward, with a 42% increase under Trump, they would have picked up nearly $65 over the same period of time. People don't think in terms of percentages, they think in terms of cash value.)