President Obama: Stock Picker in Chief

President Obama just declared at a press conference:

“Buying stocks is a good deal if you have a long term perspective.”

How does that statement help anyone? Does his wisdom apply to those people who have bought and held for 13 years who are now underwater? I am not giving slack either. Bush saying “go shopping” was dumb and Obama’s statement is dumb too. From Bloomberg:

March 3 (Bloomberg) — U.S. President Barack Obama said falling stock prices may mean bargains for investors with a “long-term perspective.” Obama, who is seeking to boost public confidence in his strategy to revive the economy, noted that major U.S. stock indexes have continued to fall this year as the recession in the U.S. deepens. “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,” Obama said at the White House today where he was meeting with British Prime Minister Gordon Brown on battling the effects of a global recession. He compared the daily market fluctuations to a tracking poll in politics and said he wouldn’t be adjusting his policies just to meet daily market expectations. “If you spend all your time worrying about that, then you’re probably going to get the long-term strategy wrong,” he said.

Is this the first President to ever attempt to offer specific stock trading strategy?

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23 thoughts on “President Obama: Stock Picker in Chief

  1. Michael, I always wonder – if these bailouts are going to be successful, how come mutual funds aren’t starting Bailout Opportunity Funds ? They could charge heck lot of fees.

  2. Michael, when I read a little while ago about the President offering advice for stock buying, I immediately thought it might strike a chord with you and was thinking of shooting you an email on the subject. But I see you’re already quite aware, lol. I’m in a bind now, should I buy stocks per Cramer’s recommendations, or the President’s? Is this what they call the new “bizzaro world?”

  3. Now the White House Press Secretary is saying not to read into the President talking about buying or selling stocks. Great. Don’t read into it? Huh? So the President just says whatever and don’t read into it?

  4. Excerpt from Martin Weiss newslist, i just cant imagine S&P composite at 150 points or less but this seems chillingly more real every day it passes…

    “Next Stop: DOW 5000!

    Clearly, bottom-picking in any great bear market is extremely treacherous. Just when you think it can’t get any worse, it does, in fact, get worse.

    Right now the market is headed for a quick rendezvous with my next medium-term target, at 5000 on the Dow.

    But even after we hit 5000, we’ll still have a long way to go. Remember: In the Great Depression, the Dow fell 89% from its 1929 high. An 89% decline from the 2007 high would take the Dow to approximately the 1500 level — a 78% drop from yesterday’s close.”

  5. Patrick, no one can predict the down move in stocks. Trend is down now until it changes.

  6. I heard that immediately when he said it, i was like WTF?? did he just offer stock advice?

  7. Of course Michael, any oracle prediction is a dead duck. I listen many folks, from Sciff, Roubini, Rogers, Weiss, Rockwell and various others but i never take their words like prophecies. Blind following of someone ideas is just plain dangerous, there is no better thing than learning on your own how to trade using some K.I.S.S. trend following strategies & sticking to them.

  8. Buffett really deserves criticism for that ‘buy stocks now’ nonsense last fall. That hurt people.

  9. Interesting buffet sold his jnj….hmmmm, odd for a buy and holder…I think shorting any stock that breaks its nov 21th lows may prove interesting. I am also stocking up on pasta.

  10. I don’t know about everyone else, but during this current downturn,recession,collapse or whatever you want to call it I’m felling pretty damn happy…

  11. Buffett really deserves criticism for that ‘buy stocks now’ nonsense last fall. That hurt people.

    Oh stop it. No one has created more wealth for his shareholders than Buffett. He is very clear about his long-term strategy. Your inability to look past next week doesn’t mean he is a bad investor.

  12. No Buffett shareholder who bought in the last 5-6 years (or however far back he has retraced) is happy. And his comments last fall were directed at EVERYONE. The richest guy tells everyone to buy stocks last fall? That hurt people who listened to him. It was irresponsible. Clear about his long term strategy? Oh really. Selling all those puts sure as hell is not something the average Buffett backer, weened on the buy and hold legend, expected. Wonder what the risk adjusted return of going down -50% is?…that is after all your favorite metric that you have been trying to harp here non-stop for months.

  13. Btw, if you buy stocks based on Buffett’s advice you must know that his favorite holding period is “forever”. Everyone who follows Buffett’s advice knows that he has a VERY long time horizon. If you buy stocks based on his advice and you’re down 6 months later you are a complete and utter moron for complaining about it.

  14. and you’re down 6 months later you are a complete and utter moron for complaining about it.

    Down how much? How far down can your stocks drop before you are not a “complete and utter moron” for complaining about it? Citigroup down 90%, BankAmerica down 85%, GE down 65%, and on and on since Buffett said “buy” only 5 months ago. These aren’t penny stocks, these were supposedly the bedrock of corporate america.

  15. If holding forever means my great-great-granchildren will reap the benefits, then sorry, i’m looking for returns in my lifetime and not just the “possibility” of seeing some returns close to retirement/the deathbed.

    For my descendants, i’d rather teach them to fish.

  16. President Obamas stock tip today was a pretty weak effort at damage control. The policies he has laid out are scaring the crap out of everyone and he knows it. Now he tells everyone to come back to the market and everything will be ok if you have a long horizon. Give me a break!

  17. Here is an example of a 10 year buy and hope strategy:
    Without risk management, stops, a system, proper bet size, entry and exit points and the ability to take losses until you catch a trend, (Oct 10th 2002-Oct. 10th 2007). This is the result:

    http://finance.yahoo.com/echarts?s=%5EDJI#chart3:symbol=^dji;range=19990301,20090302;indicator=ema(15,150);charttype=candlestick;crosshair=on;ohlcvalues=1;logscale=on;source=undefined

    Looks like we are headed lower, buy and hope?

  18. The US is officially dusted. If i were you boys i’d be moving downunder, hell i have a free couch!

  19. Dear President Obama,

    What stocks, options and/or futures should I buy?

    Where do I place my stops, how much of my capital should I risk(8-10%)?

    Is 5 years forward a long enough time horizon( see: http://www.kondratieffwinter.com/kw_wave.html)?

    Are the financials a good buy? eg., http://stockcharts.com/h-sc/ui?s=XLF&p=D&yr=3&mn=0&dy=0&id=p166085402

    Should I buy International, Global or US equities and/ ourrencies?

    Small-cap, Mid-cap or large-cap equities?

    How about Gold?

    Please advise where the American people should place stop orders,(vis a vis the S&P) in order to limit our ongoing country risk.

    President Obama,

    I am a libertarian who voted for you. I want you to succeed, for our markets to prosper. I want our country to come out of this crisis stronger than ever! Please get proactive! Consider replacing Tim Geitner with Paul Volker as Tresury Secretary. Please offer tax incentives to investors, small business, large business, creators of wealth and jobs in addition to the 95% you say will recieve tax relief. . . Thank you for listening.

    Marco

    PS. Should I use straight stops or stop limits to protect my equity, commodity and forex positions?

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