Political Commentary

Politics and Investing

Even though the stock market has risen during the Trump presidency the market probably would have done better if Trump had not been President. In particular, his decision to disrupt our global trade markets with irrational tariffs definitely had bad economic side effects. The pandemic’s negative impact on the economy masked this bad decision making by the Trump administration.

Trump made a bad situation worse by leaving office as the worst President ever. He lost by a significant margin due to major mistakes made in handling the pandemic. Even though he clearly lost, he repeatedly told the same lie that the election was stolen from him. This culminated by his inciting his supporters to attempt to violently stop the Congressional certification process. He has demonstrated he is a fake patriot, that he doesn’t understand our constitution, and that he only cares about what is in it for the himself. This perverse attitude is not good for the economy or financial markets as we attempt to recover from 4 years of the incompetent Trump presidency.

Market Commentary

At this time (mid -2021) the stock market seems to be overpriced. That is, PE levels are at the high end of their historic range. This is probably due to excessive liquidity injected into the economic system fromĀ  efforts by Congress and the Federal Reserve to save the economy from the economic slowdown due to the pandemic. The cash has to be invested somewhere and the best investment in the past year was in the stock market, particularly when there was low inflation. However, inflation in the short term is rising. As economic activity is picking up, as the pandemic abates and the country attempts to get back to normalcy, there are shortages. It is getting difficult to get workers, laid off at the start of the pandemic, to come back to work. The supply chain is experiencing shortages and important commodity prices are rising. When this has occurred in the past the stock market has been vulnerable to a correction. Most economists are predicting a growing economy in the next year, with unemployment dropping and production improving, in spite of this a correction is very feasible.