What has happened to Donald Trump's Measure of Success - the DOW?

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   My Esotericposted 6 years ago

   During the first seven years of the Obama administration, the DOW grew at roughly 10%/yr. (I discounted most of 2016 because of the artificial Trump bump caused by his promise of a big tax give-away to corporations.
   
   So far, the DOW has increased about 3.7% annually from Feb 1, 2017 to Jun 25, 2018.
   
   WHAT HAPPENED?

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      Randy Godwinposted 6 years agoin reply to this

      I heard Limbaugh say today Trump fixed Obama's broken economy.  You can't make this stuff up!
      
      Wait until the trade tariffs from the other countries kick in and check the market then, Eso.

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         My Esotericposted 6 years agoin reply to this

         Yeah, there was nothing broken about Obama's economy. It was perking along just fine, thank you.  I have been tracking Trump by the Numbers in another hub.  I did have Trump doing much better than Obama in the stock market, but not now.  At this point in time, most measures haven't changed a whole lot in their trend.  One notable exception is the number of Uninsured; it has sky-rocketed.

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            ahorsebackposted 6 years agoin reply to this

            Ahhh , your misreading it , Sure Obama's economy was idling along , Idling however isn't good enough for America when we ADD  a min. of how many NEW  workers to the force every  year ?  Can't seem to find a number.
            
            Consumer confidence ------Corporate confidence is much higher with RECORD low unemployment numbers under Trump , across the board -no matter how you twist the numbers and Obama  sure twisted them  .
            Don't forget Obama  had fairly high and even record unemployment # 's 10.+ % , high gas and heating costs , big deal about the  the stock market as it has always fluctuated .

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               My Esotericposted 6 years agoin reply to this

               Ahorseback - Which president do you think had the best record? The worst?  How many presidents broke 3% for their term?
               
               Trump still has a long way to go to beat Obama on adding jobs.
               
               Reagan had higher unemployment numbers than Obama and the recession he sort of inherited was mild  compared to the one Bush left Obama.  America is very lucky, because of Obama's policy's, that unemployment didn't break that of the Great Depression
               
               Gas prices hit and stayed at record lows (in constant $) under Obama. at least in the last 50 years
               
               As far as record low unemployment, all Trump is doing is riding on the coattails of Obama's legacy.

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            wildernessposted 6 years agoin reply to this

            ??  Of course the number of uninsured has skyrocketed: the concept that they were forced to buy overpriced insurance they cannot afford in order to subsidize others was rescinded.  But is that a bad thing - not to be forced to purchase what you cannot afford, don't want and is overpriced to boot?

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               My Esotericposted 6 years agoin reply to this

               First - NOBODY is forcing people to buy insurance THEY CAN'T afford.  The law provides for that.  It is the leeches who can afford it but won't buy it and then use free (to them) emergency service when they get sick.
               
               It is a bad thing to have a sick and less productive society with millions of people needlessly suffering because of a few people who want to abuse the system by forcing hospitals to care for them sense they refuse to buy insurance.
               
               I certainly hope these people are not buying ANY forced insurance like Social Security, Medicare, automobile, home,
               boat etc.  Otherwise, they are being total hypocrites.  Why aren't conservatives beating down the walls to make those forced insurances illegal as well?

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      wildernessposted 6 years agoin reply to this

      Ohhh goody!  I like numbers!  Let's play!
      
      Dow on 2/1/17 was 19864.09, on 6/25/2018 it was 24252.8.  The difference between them is 4388.71, and dividing by the lower figure shows a 22.1% increase.  The increase was spread over 17 months, or 1.4 years; an increase of 15.8% per year if we ignore the compounding effect of monthly increases. 
      
      But both presidents saw a large rise immediately after being elected - let's be fair and give it to both candidates as any increase was caused by their election.  Dow Jones on:
      11.4.08 (Obama elected) 9625.28
      11/8/16 (Trump elected) 18259.6
      Obama saw a rise in 8 years (let's agree to ignore the 4 days) of 8634.32, or 90%.  11.2% per year, again if we ignore compounding.  If it is accounted for the figure will be lower.
      
      For Trump, we start with 18259.6 and end with 24252.8 (let's forget that he still has about 10 days to go to reach the 8th).  The difference is 5993.2, and dividing by 18259.6 results in a rise of 32.8%.  It has been 1.75 years, so the average yearly increase is 18.7%.  Should note that proper compounding will not lower the figure nearly as much as Obama's, though, as there are far fewer months/years to consider.
      
      But I've noticed that you have a propensity to wait until a large one day drop happens, and then re-post this same basic question.  If we use the past week's average of 24600 (looking at a week's graph and estimating) Trumps figure changes to 20% per year - that seems more reasonable than cherry picking dates with low figures to show an artificially low figure.
      
      So what happened?  First, you made a bad error somewhere to come up with that 3.7% figure.  Second you cherry picked dates to make it look much worse than it is.  And finally, what happened is that Trump was elected and the stock market has risen far faster than could reasonably be predicted.  Just about double the historical average, in fact.

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         My Esotericposted 6 years agoin reply to this

         My apologies, while your math is slightly wrong, mine is majorly wrong. The proper way (there are two and apparently I didn't use either) to figure out rate of compounded growth is to take the natural log of the beginning and ending number, subtract the two and divide by the number of periods
         
         I am not sure what I did different between figuring out Obama's and Trumps, but I clearly did.
         
         As to waiting for a one day drop, actually it has been happening awhile.  His high water mark was 26,616 in Jan 2018.  So the market has fallen about 2,400 points (about 10%) in 5 months.
         
         When corporations are promised huge tax cuts, the market will go up, a lot, and it did.  Why has it fallen so much.
         
         TRUMP
         LN(24253) = 10.096
         LN((20097) = 9.908 (1/27/17)
         Subtract - 10.096 - 9.908 = .188
         Divide by 1.42 = 13.2
         
         OBAMA
         Ln(16466.3) = 9.709 (1/29/16)
         Ln(8000.89) = 8.987 (1/30/2009)
         Difference = .722
         Divide by 7 years = 10.3
         
         If I use Obama's 8 years it is 11.5%

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            wildernessposted 6 years agoin reply to this

            That's interesting with the log.  It is a branch of math I never studied at all and I'd never seen that method.  I'll have to remember that.
            
            But aside of failing to compound (which I noted) was there another error?
            
            As to why it has fallen so much, I'd first want to examine the market for trends and then look at other possibilities.  I say that because I've had it the back of my mind after several years of watching my 401 (S&P, though, not DOW) that the first half of the year is seldom as good as the second half. 
            
            And yes, you most certainly DID pick a day with a very large one day drop.  Whether the market has fallen since January, it did not fall at the rate of 300+ points per day (the drop yesterday)!  Nor is it the first time you've tried that bit of spin.

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               My Esotericposted 6 years agoin reply to this

               It must be the natural log; base 10 log doesn't work.  It is so much easier than the other way and much less prone to error as I just found out.  I am a creature of habit, so I kept using the old way
               
               BTW, take the 300 point drop out, it only improves things by 1 percentage point.

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                  wildernessposted 6 years agoin reply to this

                  Yes, I got it was the natural log - I'm just too lazy to hit the "n" key.
                  
                  Yes, a small improvement, to 14.2% - a quarter again what Obama did while starting at rock bottom rather than the top of the top.  I think your comparison is somewhat reasonable (although I would use the total time span, not leave out the best either President produced) even though the time span is way too short for Trump yet, I just question the conclusion it is somehow "bad" while proving it is superior.
                  
                  In any case the next 6 years will tell a far better tale.  If the world economy doesn't collapse, anyway.

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                     My Esotericposted 6 years agoin reply to this

                     I found what I did wrong.  I used 21,253 instead of 24,253

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                        wildernessposted 6 years agoin reply to this

                        That would do it for sure.  Hate those typos!

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      My Esotericposted 6 years agoin reply to this

      CORRECTION!!
      
      Wilderness pointed out a small error in my arithmetic.  OK, it was a large error.
      
      The 3.7% annual growth I attributed to Trump is actually 13.2%.  I would like to say it was a typo, but it wasn't.  I am not sure what went wrong with the Trump calculation but  it clearly did.
      
      Having said that mia culpa, let me point my basic question is still valid.
      
      Instead of pointing to a dismal growth number, I will bring up two things, 1) the market has corrected downward about 10% since the mid-Jan high point and 2) Trump has stopped saying how good the market it is.
      
      Just a point in fact, if the market corrects another 10%, which is possible in a trade war, then Trumps growth will be cut to 5.5% (assuming 1.5 years into his presidency). 
      
      A second point is that Trump's current growth of 13.2% is on par with Obama's full-term growth of 11..5%.  In other words, the market under Trump is doing no better than under Obama, with this one caveat - The market is heading down at the moment (with no upside in sight) while Obama left him an increasing market.

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         wildernessposted 6 years agoin reply to this

         I can't post it here large enough to see, but looking at the graph at
         http://www.macrotrends.net/1358/dow-jon … t-10-years
         We see the short downward glide you refer to.  We also see some rather similar downward spikes in 2010, 2011, two in 2012, 2015 and 2016.  It seems way too early to get too excited about a fairly small adjustment, especially after everyone was predicting it after the enormous gain.
         
         It might be worth noting that Obama took office just at the end of a massive recession; the stock market had better rise, and rise rapidly!  On the other hand, Trump took office at it's highest point ever; for it to continue a meteoric rise well above the average was unexpected, and doubly so after all the doom and gloom predictions of another tremendous recession if he won.

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            My Esotericposted 6 years agoin reply to this

            Yes, you are correct in this since, both the 2011 and 2015 downturns were of the same magnitude corrections. The first was in the turmoil following the recession.  The second was in the middle of an international economic crisis (Greece, among other things).  Neither of those are present here.
            
            The current sell-off is in its 5th month, the 2015 downturn lasted about a year, until things cooled down in Europe.

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               wildernessposted 6 years agoin reply to this

               The graph shows the 2015 downturn was from Sept to Nov, when it was back to what it started at, not a year.  It also shows another one about 3 months later, (in 2016) lasting about the same time.
               
               The current "sell off" appears to have happened the first part of Feb, in a very short time, and has remained pretty stable since then.  No further "selling" - just normal operations with normal daily variations.

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                  ahorsebackposted 6 years agoin reply to this

                  What the nay -sayers don't  admit or know ?  Is that a decent stock market ride only {Obama },against a high consumer confidence , low unemployment , higher corporate confidence AND a strong  stock market {Trump } is far better than a good market ride only .
                  
                  Isn't that simple ?

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