Re-Election of President Obama: Investment Perspective Going Forward

Today’s election was merely a choice of who was going to be the Captain of the Hindenburg or Titanic.  Both of which ended in complete disasters.  Now, let’s review my election forecast going back to June 2011, especially my comments made on September 13, 2012.

1.     On June 15, 2011 in my post entitled, “First Presidential Forecast,” I made the following comments: “In making any kind of forecast is definitely a risky business, but to forecast the 2012 Presidential election is insane.  However, I feel that I maybe on to something, insane or not.  Now, if the stock market is higher in 2012, President Obama is more than likely to win.  The strategy that I will be using is simply my S&P 500 EMA Strategy of the 15-week EMA to 40-week EMA.  If the 15-week EMA is above the 40-week EMA, Obama wins.  On the other hand, if the 15-EMA is less than the 40-week EMA, he loses.  Currently, President Obama wins, because the 15-week EMA > 40-week EMA.  However, the key is what will the EMA strategy be saying in 2012.  Stay tuned.”  Well, the 15-week EMA has stayed above the 40-week EMA.  Enough said.  President Obama is re-elected.

2.     On February 18, 2012 in my post entitled, “And, the 2012 Presidential Winner is … ,” I made the following comments: “Since my post of June 15, 2011, I came across an interesting study that reinforces my aforementioned hypothesis, entitled “Social Mood, Stock Market Performance and U.S. Presidential Elections: A Socionomic Perspective on Voting Results” by Robert Prechter, Deepak Goel, Wayne Parker, and Matthew Lampert, contends that citizens vote in accordance with trends in social mood, and that stock market indexes appear to be the best available indicator to measure social mood.  According to their study, voters really don’t care about jobs numbers, GDP growth, European debt crisis, and the decline in home prices.  Instead, they respond to fluctuations in the stock market.  That is, the value of their stock portfolios and 401K plans.  Therefore, if the Republicans want to capture the White House in November, they better hope that the S&P 500 crashes!”  Well, the stock market did not crash and President Obama was re-elected.

3.     On September 13, 2012 in my post entitled, “And, the Winner of the 2012 Presidential Election is?  President Obama,” I made the following comments: “President Obama is likely to win in his re-election bid based on the performance of the stock market over the past three years.  Therefore, the probability of President Obama being re-elected is high! So, how can one use the above information against the backdrop that the next four years will usher in the largest economic/financial disaster known to man with the DJIA selling for 1,000?  (Yes, the coming economic downturn will be greater than the Great Depression of the 1930s.)  Given the scenario, I don’t consider whomever occupies the White House will win any popular contests.  Remember that over the next four years the expected social mood of this country will change from positive to very “bleak.”  Therefore, the man that occupies the Presidency will undoubtedly be highly despised.  In other words, the proverbial bottom-line is to vote for the candidate you like the least.” 

 4.     On October 29, 2012 in my post entitled, “It’s Still Obama’s Election to Lose,” I made the following comments: “The Elliott Wave Theorist has done extensive research on those factors that influence re-election outcomes of presidential races. Its research revealed that the stock market is an “excellent indicator” of re-election outcomes.  In addition, GDP had a moderately positive relationship to re-election results; and inflation and unemployment rates had “no” significant predictive value.  It tested stock-market performance 1, 2, 3, and 4 years prior to elections and found all of them to be significant.  However, the 3-year time horizon leading up to the re-election was the most significant.  So, where do stand based on the 3-year time horizon?  Given the 3-year time frame, the DJIA has gained approximately 36%.  Even though the economy remains weak, GDP growth between 1% to 2%, the 3-year positive trend is how people feel, as measured by the performance of the DJIA, continues to give the edge to President Obama in his re-election bid.”