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Wall St. sheds its tears

Posted at 4:34 PM on November 7, 2012 by Bob Collins (5 Comments)
Filed under: Economy, Politics

In the wake of yesterday's election, Wall Street had its temper tantrum today, closing down more than 300 points in one of the worst days in years. Analysts tend to make these things up as they go but they're blaming it on several factors such as four more years of fiscal policies, the coming "fiscal cliff," Europe's debt, and the poor play of the New York Jets.

T. Boone Pickens told CNBC that the financial markets thought Mitt Romney would win, a fairly interesting comment considering the markets are all about numbers and Nate Silver seems to master them better than the smart people who are in a business that's all about numbers.

But none of the factors dragging down Wall Street today should have been any mystery to any investor yesterday, but the market is an emotional thing to begin with.

How does today's financial self-flagellation compare? It was the second worst post-election market sell-off since the 1940s, the worst was when Obama was elected in 2008. But that sell-off didn't come the day after the election; it came two days after the election, and a day after it shot up almost 300 points. How do these predictions work out?

Date	Winner	Dow open	Dow close	% Diff	% Diff 4 years later
11/7/2012	Obama	13245.68	12932.73	-2.4%
11/5/2008	Obama	9625.28	9139.27	-5.0%	41.5%
11/2/2004	Bush	10053.87	10035.73	-0.2%	-8.9%
11/8/2000	Bush	10954.34	10907.06	-0.4%	-8.0%
11/6/1996	Clinton	6081.18	6177.71	1.6%	76.6%
11/4/1992	Clinton	3252.48	3223.04	-0.9%	91.7%
11/2/1988	Bush	2150.96	2156.83	0.3%	49.4%
11/7/1984	Reagan	1244.15	1233.22	-0.9%	74.9%
11/5/1980	Reagan	950.34	953.16	0.3%	29.4%
11/3/1976	Carter	964.93	956.53	-0.9%	-0.4%

Comments (5)

I find it difficult to believe that large investors were shocked that Romney didn't win (it wasn't just Silver predicting the result, several others, did as well, including the polls). Maybe there was some sell-off as an emotional response... as to your point regarding market analysts:

http://www.youtube.com/watch?v=HL_vHDjG5Wk

Posted by Mark | November 7, 2012 4:53 PM

No one can really prove why the market does what it does. Market went down? Find items in the news that people think makes markets go down and ignore the rest. Market went up? Find news that's good for business and ignore the rest. Voila' ... instant stock market expert.

This is why no one can reliably time the market.

Posted by John P. | November 7, 2012 5:04 PM

Kind of sounds like the same reasoning for gas prices...

Posted by Joe | November 7, 2012 5:23 PM

Amazing late in that clip how much Sheen looked like his kid.

Posted by Bob Collins | November 7, 2012 5:24 PM

I recall Romney saying in the infamous 47% video that "the markets will go up, just by me being elected." I guess we'll never know now...

Posted by Tyler | November 7, 2012 7:57 PM