During an Oval Office press conference with British Prime Minister Gordon Brown and with reporters, President Obama compared the ups and downs in the stock market to tracking polls that do not predict real outcomes.
Obama said he is looking at “the long-term ability for the United States and the entire world economy to regain its footing….” He noted how the banking system was dealt a serious blow and said that it was not surprising that the market is hurting. But here is where the question arises if you think he called for long-term buyers to take a look at stocks here.
Obama noted, “On the other hand, what you’re now seeing is profit and earning 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.” That statement might not be an endorsement of saying there is “long-term value” in stocks, but for a comment from the President (or from any other political leader) it may be as close as you can get.
We do not like to cover the political aspects of every issue out there. But when it comes to money, it does feel like right now that there is no single issue driving the market more than what is coming out of Washington D.C. Traders and investors have been selling every new policy and just about every new speech when it comes to finances.
Some might interpret this as political. It is not. The lesson of trading and investing is a simple one: buy low, sell high. When you know Washington is going to be extra hard on a sector, what is the normal reaction to do with your money? And when Washington is going to endorse markets?
If the market participants feel like President Obama is giving a long-term endorsement of the stock market, maybe they will at least start to take a different stance. Or, maybe they will just consider it spin.
Jon C. Ogg
March 3, 2009
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