MARKET PERFORMANCE BY PRESIDENT
Issue # 49
S&P 500 PERFORMANCE by PRESIDENT:
From Jim Reid of Deutsche Bank, “with President Biden’s inauguration today it’s a good point to reflect on how equities have performed under various Presidents since the start of the 20th century.
A few summary bullets:
In annualized terms, Trump’s presidency has actually seen the second-best S&P 500 performance since the Great Depression, only surpassed by Bill Clinton’s that coincided with the dot com bubble. He drops to third since 1900 however, as Coolidge was President in the 'roaring 20s' including the bubble levels late in the decade.
No Democratic president has presided over a decline in the S&P 500 in total return terms over the period covered. A positive signal when it comes to the Biden presidency?
On average, the stock market has performed stronger under Democratic presidents than Republican ones. But was this skill in their economic handling or simply bad luck on timing for the Republicans? For example, the US had a Republican administration when the pandemic hit last year, the period between the peak of the dotcom bubble and the GFC lows (Bush Jr.), when the 1973 oil shock occurred (Nixon), and during the Depression (Hoover).
Herbert Hoover is by far the worst on stock market performance, with no one else even close (-28% annualized). He had the misfortune of presiding over the 1929 Wall Street Crash in the first year of his presidency, and then a sustained period of stock market declines amidst the Great Depression.
So Biden’s success in stock market terms might be down as much to luck than policy over his term in office”.
MARKET BUBBLES:
Also from Deutsche Bank, a survey of institutional investors on where they see bubbles in the markets. For reference, 0 is no bubble and 10 is an extreme bubble.
Not a suprise that many investors see Bitcoin and U.S. tech stocks as the biggest bubbles; european sovereign bonds are third. Recall that in Europe you pay the governement for the privelidge of holding your money for 10 years!
TESLA:
I am a believer in the electric revolution. I drive a BMW i3 electric car which is powered by 36 solar panels on my roof. But….. even I am a little cautious on Tesla’s current valuation when I look at the graphic below!
PODCAST:
MacroCrunch: Check out the MacroCrunch podcast on Apple. I posted 6 episodes where I interview top investors in their respective fields. The first one that I recorded was with Anthony Pompliano on Bitcoin, which is timely and I would also recommend episode 5 with Cody Willard on Investing in Revolutionary Companies. The episodes are generally 30 minutes long and I plan to release many more in the near future.
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Be well and stay safe. Sean Bill / MacroCrunch