stl every bloke i know asks about S&P cagr at inception.
Trump certainly did, first through tax cut, and then through trade war the other way. Obama was probably slightly negative overall, as he raised taxes and increased various regulations. However, he was also there throughout a Fed loosening cycle…
Agree 95% but to Ohai’s point, tariffs and taxes were real impacts although that kind of executive action is rare.
true. actually my thoughts on their impact is kind of different from how most people think.
on higher tariffs, it’s a short term costs as supply chains are rerouted and consumption declines, but may have long term positive impact as we improve our industries or go from consumer nation to saver nation! (hopefully).
lower taxes, short term benefits in terms of higher profits, and valuations, but will have long term negative costs as deficit grows, in the form of higher taxes in the future, and higher interest costs.
overall i see both policies as negative! the federal reserve prolly saw these inflationary policies and was like, gotta raise rates! 
Nerdy is correct, you can’t possibly untangle the impact of trump policy vs the momentum from obama years. Tax cuts certainly are a positive for the market, but with Yellen still there (under democrat) her dovish policies would also contribute to a rising market and possible even stave off the recent vol we’ve seen. Who knows, only certainty is that it ain’t certain.
Perhaps rare in the past, POTUS is Chief Market Pumper these days.
More precisely, the permanent government pumps the market, and the POTUS is front-office selling the bullshit.
Right, how are you untangling low rates and the tailwinds coming out of 2008 for Obama? But yeah, you definitely can, I mean anybody who works in this industry has a rough idea of the impact given its their job.
Go back to the original post, having a “rough idea” is very different than being certain of something. That’s my only point.
George washington deserves all the credit
Point is I can understand the approximate impact without total certainty fo the exact quantum. That’s true of anything in economics, it’s never exact but we get paid to figure it out. We know tax changes had an immediate and measurable impact on cash flows and valuations of companies, it’s actually one of the clearest measurable economic impacts out there. My point is that trying to claim there may be something from the “Obama momentum” is an overall non-point. If anything, that could more be said about the prior presidency which just road the economic recovery from a financial collapse and the resulting low rates. Trump actually achieved it amid rate hikes.
It’s flimsy to the point that someone trying to deny the near term impact of taxes on market valuations and the resulting stimulus (including from repatriation) loses a lot of credibility because they’ve obviously let bias cloud a basic understanding of economics and markets.
You guys aren’t making any sense.
It’s been 10yrs of moves that per CAPM obviously pump markets (QE1/2/3, ZIRP, corporate tax cuts [i.e. QE4]). They have to keep this up, or the market collapses, but eventually they run out of tricks. What is difficult to understand?
Ugh, point is, your approximate impact with big error bands is just a lottery ticket. Just cuz you get paid to figure it out, doesn’t mean you can – it’s just vanity. That’s no knock on you, you seem like a smart guy. Reality is you can’t tell me with certainty whether to buy TSLA or coke vs pepsi, or merck vs lilly…that’s already super hard. Yet you think you can understand with certainty what drives something as complex and intersectional as the economy or stock market? The smartest guys in the hedge fund world are the macro guys, they thrive on being able to figure out complex global relationships between equity, rates, currencies…but the dirty little secret is they rarely make any money or even earn their fees.
Yes. Micro-analysis is impossible, macro-analysis is much easier.
I already told you the answer, the USG (and coalition of Western market pumpers) drives the stock market. “Whatever it takes” (ECB) means with certainty.
Two different things. True that we are the smartest guys. But you are conflating correct macro-analysis, with hedge fund returns. Multiple reasons, which you should be able to figure out for yourself, why these are not the same thing.
Here’s what I am not incorrectly conflating – macro guys and not making money. And that ain’t no corporate overlord brain washing me, I am just looking at my performance statement.
lowering taxes has an immediate effect on cash flow. but keep in mind you should be valuing businesses based on their long term prospects. the tax code is typically mean reverting. so the reduction of taxes right now, while we are at a trillion deficit, and a level of debt exceeding our gdp, will not have a permanent effect. it is a one time pump and dump.
Don’t forget repatriated capital and immediately expensed CAPEX.
You belong to your father, the devil, and you want to carry out your father’s desires. He was a murderer from the beginning, not holding to the truth, for there is no truth in him. When he lies, he speaks his native language, for he is a liar and the father of lies.
- John 8:44
Not making money for the investor, not the same as them not making money.
Welcome to the biz, kid! 
…valuation. So I was working on this model last month, and the CFO reminded me to update the tax rate. Valuation went from $4.4B to $5.5B, nice bump. The USG is all about artificially pumping up worth, but not net worth.
Yeah right. They couldn’t pull back QE/ZIRP without adding corporate tax cuts to keep the Ponzi from imploding, and now they can’t pull these back, unless they think up something else…but they are running out of bullets. The cut just deepens the coming government default. Nothing is ever going to (voluntarily) revert, they are just going to go until a dark-ages-like collapse.
Uhh, well. The market will treat it as permanent. But yes the other side of the accounting is going to fuckin’ hurt!