Posts filed under “Data Analysis”

4 Year Presidential Cycle

I have always wondered how the Presidential Cycle plays out in the 2nd term of a
Presidency; Unfortunately, there are not enough post-war 2 termers
around — Eisenhower, Reagan, and Clinton — to draw any firm
conclusions as to how this year’s cycle may unfold this year.

Regardless, this is an informative chart from Birinyi Associates:

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Average S&P 500 Performance During Year Two of a Presidential Term: 1962 – 2006
click for larger chart

Average_year_2_performance

Source: Birinyi Associates, Inc.

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We’ve discussed this phenomena many times in the past; Note the big failure year for the cycle was 1986, with the correction low postponed to 1987.

Birinyi Associates observes:

As the table [below] details, there is some truth to this theory as the second year has been the worst of the four-year cycle in over half of the 11 full cycles since 1962, and it is the only one with an average negative return. We also plotted the YTD performance of the S&P 500 this year vs. the average second year return since 1962. As the chart (above) shows, there is a good degree of similarity between the patterns of this year vs. prior years.

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Annual_spx_change_1

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UPDATE June 28, 2006 5:58am

Some skepticism about the 4 year cycle leads me to show these additional charts and table. Note that the 2nd year low presents an unusually good buying opportunity:

Table:  1919 – 1998

Pres_table_

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This chart runs from 1950 to 1998; I find it rather persuasive:

4_year_cycle.jpg

I first posted the original larger version here.

Category: Data Analysis, Politics, Psychology, Technical Analysis

The Increasing Pressure on the Middle Class

Category: Data Analysis, Economy, Employment

New Real Money Column: Ignore Statistical Oddities at Your Peril

Category: Data Analysis, Economy

CPI Null Set (via The Economist)

Category: Data Analysis, Federal Reserve, Financial Press, Inflation

Read it here first: The Cost of Sarbanes-Oxley

Category: Corporate Management, Data Analysis, Financial Press, Markets, Politics

James Altucher: “The Underlevered American Household”

Lets just look at what’s wrong with a few items in Jim Altucher’s column yesterday, “The Underlevered American Household.” I may have to address the rest of the erroneous analysis in a full column — but for now, let’s stick with the first chart in the article. Jim believes the following chart is “mostly useless.”…Read More

Category: Data Analysis, Economy, Retail

A Deceptively Simple Timing System

Category: Apprenticed Investor, Data Analysis, Earnings, Fixed Income/Interest Rates, Markets, Technical Analysis

Major Internet Site Web Traffic

Category: Data Analysis, Web/Tech

Stock Prices Adjusted for Inflation

Category: Data Analysis, Technical Analysis, Valuation

What Happens if Inflation Is Overstated?

Category: Data Analysis, Economy, Federal Reserve, Inflation, Markets, Real Estate