President Obama Made One Of History's Greatest Stock Market Calls
REUTERS/Brendan McDermidTraders work on the floor of the New York Stock Exchange, Nov. 5, 2010.
US presidents don’t usually talk about stocks.
But when they do, everyone listens. Because, who wouldn’t love to remind everyone that the President of the United States, like us, is terrible at making stock market calls.
However, it turns out that President Barack Obama made one of the most perfectly timed market calls in the history of market calls.
In a July note to clients, Goldman Sachs’ David Kostin remembers that time Obama talked about stocks. From the note:
Some investors may remember Obama’s previous equity valuation comment from March 3, 2009 when the S&P 500 traded at 696: ”On the other hand, what you’re now seeing is profit and earnings ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it.” Since his observation, the S&P 500 has soared by 185% and this week reached a new all-time high of 1988.
March 3 was six days before the S&P 500 hit an intraday low of 666. This was a time when naysayers were saying Obama’s radicalism was killing the stock market.
On Tuesday, the S&P closed at a record 2,082. That’s a solid 200% gain in a little under 6 years.
That was a pretty extraordinary call.
So, what now?
Unfortunately, we don’t pay Obama to advise on the tactical asset allocation decisions for our investment portfolios.
He did, however, offer some long-term wisdom during a July interview with CNBC’s Steve Liesman.
“My estimation is you’ve got a lot of savvy investors out there,” he said. “You got people who recognize that what goes up can come down as well. I’ll leave it up to them to make determinations about whether valuations and stock prices are too high. I’m more concerned about the day-to-day fundamentals. And if we get those fundamentals right, then I’m pretty confident that we can do very well in the next decade.”
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President Obama Made One Of History's Greatest Stock Market Calls
