This blog post is about change and the dangers of forecasting.
In October, we all thought Hillary Clinton was going to be president. Those who pontificate explained to us why that was a good thing as well as the ways it was a bad thing.
On the plus side, we were assured the stock market would not behave as though it was a White Star Line cruise ship and Trump the iceberg.
Whenever I think of that horrible "Titanic" movie, I only remember this line: “Iceberg! Straight ahead!”
Anyway, we were assured for certain that Trump meant bad news for your 401(k). Politico even predicted a “major crash” if Trump pulled off the upset.
“Wall Street clearly prefers a Clinton win certainly from the prospective of equity prices,” said Dartmouth College’s Eric Zitzewitz, one of the authors of the a study along with the University of Michigan’s Justin Wolfers. “You saw Clinton win the first debate and her odds jumped and stocks moved right along with it. Should Trump somehow manage to win you could see major Brexit-style selling.”
So how did that work out? At last look, the market was steaming toward 20,000, up from 18,332 on Election Day.
That was a pleasant surprise. And it wasn’t the only one. The Trump win introduced a new variable to the Department of Labor fiduciary rule. Overnight, the rule went from a virtual certainty to life support, where it remains.
The problem is the good news came too late for responsible firms who had already dumped millions into compliance upgrades to meet the rule mandates.
Those firms are now struggling with where to go from here. Andrew Puzder will certainly put the fiduciary rule on ice once he is confirmed by the Senate, right?
Sometimes good news creates a new set of problems.
I had two goals for this blog post. No. 1, to point out how horribly off-base academics, financial analysts and pundits were in predicting Trump’s effect on the market. I cite one source here, but there were so many more.
I had an academic tell me how Trump represented uncertainty and markets don’t like uncertainty. Maybe the surge won’t last, but right now, it’s quite remarkable.
It took the Dow Jones 21,562 days to even reach 1,000 – on Nov. 14, 1972. The Dow is up 2,031 points in the last 40 days alone. Stunning.
My second goal was to share this tweet from former ML pitcher Dan Haren:
Two years ago I beat Corey Kluber 1-0....Today, I walked my 2 pugs while wearing a "pug life" t-shirt. Life comes at you fast.
— dan haren (@ithrow88) October 26, 2016
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org.
© Entire contents copyright 2016 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.