Tags: obama | market | timer

Obama: Market Timer in Chief

By    |   Tuesday, 12 May 2009 02:44 PM

If you were trying to time the bottom of the stock market, who would you turn to?

Perhaps Warren Buffett, arguably the world’s most successful investor of the past 40 years. Or perhaps you’d select market strategists extraordinaire Barton Biggs and Laszlo Birinyi.

Well, think again. You would have done better with President Barack Obama.

On March 3, six days before the Standard & Poor’s 500 Index hit its 12-year closing low, he said, “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.”

It seemed like an off-handed remark designed to reassure Americans who had seen their 401(k)s and pensions plummet in value.

And it probably was. Yet, stocks have jumped 30 percent since Obama made that casual call.

Warren Buffett wrote a column in The New York Times Oct. 17, touting the U.S. equity market. “I’ve been buying American stocks,” he wrote.

And what happened afterward? Stocks plunged, and the S&P 500 is still down 4 percent from that day.

To be fair, Buffett warned in his column, “I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now.”

Birinyi and Biggs should offer the same warning.

Birinyi said Dec. 8 that stocks reached their nadir in November, Bloomberg reports. The S&P proceeded to drop 26 percent.

Biggs said Nov. 6 that the decline had ended in October. Wrong to the tune of a 29 percent plunge by the S&P, Bloomberg points out.

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If you were trying to time the bottom of the stock market, who would you turn to?Perhaps Warren Buffett, arguably the world’s most successful investor of the past 40 years. Or perhaps you’d select market strategists extraordinaire Barton Biggs and Laszlo Birinyi.Well, think...
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Tuesday, 12 May 2009 02:44 PM
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