Corruption In Plain Sight?

The equity markets, better known as the stock markets, have been touted by Trump and his minions as evidence of his impact on the American Economy. Just looking at what has happened tells a very different story.

If you follow the time after the G.W. Bush Administration, using the S&P 500 as the index, you’ll see that during the Obama years the equity markets increased just under 300%. During the first year of the Trump Administration, before Trump had attempted any influence on…well…just about anything (but especially the economy) the equity markets advanced another 26%. Then the big Republican brainstorm, the tax cut for large corporations and the wealthy, kicked in. What’s happened since then?

(Note: The following calculations are all my own; I did not pick them up from any site - left, right, or center. They’re in plain view for anyone with a grasp of arithmetic to see.)

If you had $100,000 invested in an indexed stock fund on January 26, 2018 and held it, it would be worth $99,233 today. That would be the result of Trump and his Republican Congress performing 20 months of their “economic magic”. It would likely be the case for an ordinary worker with a 401K who contributes to his account to accomplish long term goals, like retirement.

The fact is that whatever they had left in equity investments in 2009 was (after the devastation that took place during the Bush Administration) salvaged and recovered by an economy overseen by the Obama Administration (which really includes the first year of Trump’s Presidency). Since that time, beginning with 2018, the American equity markets (as shown above) have been essentially flat - no growth for the long term investor. However, the equity markets themselves over that period look like a patient going in and out of cardiac arrest.

Maybe somebody can, but I can’t find a year and a half period with the same degree of volatility. It’s hard to see how anyone benefits from this instability…or is it?

The dramatic swings in the equity markets have all been either directly or indirectly the result of pronouncements or actions made by Donald Trump. It would be ridiculous to suggest that Trump and his confidants are not aware of this. Given his ego, he surely revels in the impact a couple of his tweets can have on the American economy or even the world economy. His psychological abnormality is a clear and present danger to us all.

Yet, is Trump’s overfed ego the only winner in these displays of erratic behavior…quite possibly not.

Wealthy individuals with the cash, the investment tools, and (most importantly) some sense or knowledge about Trump’s queer pronouncements might see their investments during this last 20 month period look considerably different than the average American who hasn’t earned a penny (or even lost money) over the same period.

If an investor had $1,000,000 on that same January 26, 2018 in a indexed S&P 500 exchange traded fund, sold out and bought short positions at the top of the market (meaning they’re betting the fund would drop in value), then “sold” short at the bottom and bought back into the same fund, and did that over and over each time Trump snorted or passed wind, their investment would be worth $4,503,500 today.

That estimate is just on an indexed fund. Targeted investments in the even more volatile Dow or NASDAQ stocks could increase that return exponentially.

Normally investors don’t know the top and bottom of stock markets, and timing purchases and sales to correspond to the market’s highs and lows has been considered a gambler’s folly. However, when these investments react predictably to the uttering of an empowered fool, then it becomes reasonable to consider that knowing what this fool is going to utter next has real value.

 The reality is that the only thing predictable about Donald Trump is his unpredictability. He has literally said that and takes pride in that fact.  To think that savvy people (including Trump himself) see that the most advantageous route between two points is a crooked road is not hard to consider.  When it comes to money and sex, what is right out in plain sight is usually correct.