President Obama addresses the declining stock market:
Obama said he wasn’t focused on “the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing.” he compared the Dow Jones Industrial Average to a daily tracking poll in politics. “You know, it bobs up and down day to day,” he said. “And if you spend all your time worrying about that, then you’re probably going to get the long-term strategy wrong.”
In doing show prep, producer Duane just asked me if most Americans believe that when they invest in a company, they’re investing in a daily tracking poll.
Clearly he’s just using the tracking poll as a metaphor. But the problem is, his answer suggests that he sees recent declines as standard-issue volatility. The markets really aren’t “bobbing up and down day to day.” They’re pretty much declining, day after day. Some days it’s steep, some days it’s less steep.
On October 1, the Dow was 10,831. On November 3, it was 9,319. On December 1, it was 8,149. By January 1, it actually went up a bit, 8,776. On Inauguration Day 2009, the DJIA closed at 7,949.09. Now it’s around 6,730.
Obama also said that buying stocks now “a potentially good deal if you’ve got a long-term perspective.” Yes, but the problem is, anybody who had their money in stocks in the past six months has a much smaller net worth than they did a few months ago.