Doc Ed points out that second presidential terms are not especially kind to equities. Presidential first terms of the past 11 elected presidents starting with Franklin D. Roosevelt were up an average of 50%. However, S&P500 only rose 16% during the second terms of the past six presidents who were re-elected.

There are problems with this being a small sample set, but it is an interesting anecdotal observation nonetheless.

 

Hat tip Pensions & Investments

 

Source:
Second Terms
Ed Yardeni
Dr. Ed’s Blog, November 8, 2012
http://blog.yardeni.com/2012/11/second-terms.html

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

14 Responses to “Yardeni: Beware 2nd Terms”

  1. denim says:

    O for heaven’s sake smooth the data. Republican Presidents clearly are bad for the economy as a whole. They are too busy helping the haves and have mores get even more.

  2. louiswi says:

    The best and obvious take away from this chart is that in a lifetime, the slope is from the far lower left to the far upper right. For a “Ron Popeil-Set it and Forget it” investor, the takeaway is profound.

  3. constantnormal says:

    One could also make the point that when second terms occur in the context of secular bear markets, the S&P 500 does not do as well as when the second term occurs in the context of a bull market. Or that second terms tend to bring about bear markets. Or a lot of other stories, limited only by the imagination of the storyteller.

    http://www.ritholtz.com/blog/2010/07/4-secular-bear-markets/

    One can make a lot of stories, but that’s all they are … just stories.

    This is nothing more than paintings on a cave wall.

    When you can construct a model , put numbers into it, and have predictions pop out that are almost always right, then you’ve got something of value. Otherwise, like the cave paintings, it is mostly art … of value only when you can sell it to somebody else.

  4. gordo365 says:

    I get it – down, up, down, up, up, down. Very instructive.

    Hey Dr. Ed- do you want to play high stakes poker this weekend? My normal poker group has an opening…

  5. carchamp1 says:

    Barry, You don’t believe in stuff like this, do you? And is Ed Yardeni really a “doctor”? If so, what exactly is he a doctor of and where did he get his degree? This “analysis” is not worthy of your blog, sorry to say.

    ~~~

    BR: I thought “There are problems with this being a small sample set, but it is an interesting anecdotal observation nonetheless.” was self explanatory

  6. ancientone says:

    Well, lets see: Roosevelt foolishly listened to the deficit hawks and cut government spending, and then WWII came upon us; Eisenhower had an up market; Nixon had a terrible problem with inflation after he cut the dollar loose from gold, and oh yeah, there was that Watergate thing; Reagan had a good up market except for that one really bad week in 1987; Clinton had a great up market; and Bush had a good market until the ghosts of Coolidge and Hoover came to visit. To try and lump all these vastly different circumstances into a “second term” basket seems beyond unreasonable.

  7. James Cameron says:

    > However, S&P500 only rose 16% during the second terms of the past six presidents who were re-elected.

    Events from Clinton’s second term and both of Bush’s second terms, especially the last, are really dragging this number down. It would be more interesting to see the performance for every term (which I imagine has been published a zillion times somewhere or another).

  8. Joe Friday says:

    Yardeni: Beware 2nd Terms

    Yardeni ?

    His past track record of calls is atrocious.

  9. Joe Friday says:

    ancientone,

    Bush had a good market until the ghosts of Coolidge and Hoover came to visit

    The stock markets are down and have yet to get back to where they were in 2000, in inflation-adjusted dollars.

  10. wally says:

    Looks like a 3-3 tie to me.

  11. rocketgas says:

    Lies damn lies and stats. so I have a olde but a goodie for you mr. numerate
    1992-10-01 4177009
    1993-01-01 4230580
    1993-04-01 4351950
    1993-07-01 4411489
    1993-10-01 4535687
    1994-01-01 4575869
    1994-04-01 4645802
    1994-07-01 4692750
    1994-10-01 4800150
    1995-01-01 4864116
    1995-04-01 4951372
    1995-07-01 4973983
    1995-10-01 4988665
    1996-01-01 5117786
    1996-04-01 5161076
    1996-07-01 5224811
    1996-10-01 5323172
    1997-01-01 5380890
    1997-04-01 5376151
    1997-07-01 5413146

    Which is show me the surplus in there. Good freaking govt math to you

  12. gordo365 says:

    @rocketgas – I’m interested in your post – but have no idea what I’m looking at. Please take a sentence to explain and give context. Preferably before posting 1st time :)

  13. ancientone says:

    Joe Friday, the discussion is about when Bush was in office (the pink zone), and I stand by my statement. Everything was going fine in the market until the unregulated real estate and banking sectors tanked the economy. What don’t you understand about that?