With the recent move of the Dow Industrial 30 to over the 20,000 mark, the new Presidential Administration and its proponents were quick to take credit for this milestone achievement. Kellyanne Conway quickly claimed this milestone achievement to be attributed to “The Trump Effect”. The President’s son, Eric, known throughout the world as an enlightened financial guru, tweeted: “Amazing... and he’s just getting started.”

Sophistry at its finest—something I think we may have to get accustomed to for the next four long year.

With regards to the Dow 20,000 and Presidential credit, I thought it might be useful to look back to see how the Dow progressed to this landmark point by looking at its progress through the last eight Presidential terms—all the way back to 32-years ago, 1985. The way that I did this was by looking at where the Dow stood on January 1 of the year each President was sworn into office.

Granted Presidents are sworn in on January 20, but I felt that January 1 provided a reasonable measuring point being nearly two-months after a winning election and only twenty days before each President was sworn in for a new term in office.

The table below provides the results of this historical analysis.

Now there are a lot of different ways one can look at the above table and surely one could claim that there are a lot of various caveats that should be applied in its interpretation, administration by administration. Therefore, I will leave any administration by administration comparisons for the reader to make on their own. 

Regardless, I would like to remind the reader that the table does show a historical perspective of the Dow covering a period of 11,688 days—quite a few more than the few short days of the current Presidential administration.

Since January 1, 1985—the beginning period of Reagan’s second term, to January 1, 2017—a period of 32-years—the annual compounded growth rate of the Dow Industrial 30 has been an astounding 8.95%. A rate that I will have to admit is even higher than what I expected as I set out to capture the data for this analysis.

So, before we go giving this new President of Ours (and I say this with a bit of chagrin because I have a very difficult time claiming him as “my” President) credit for the Dow 20,000—let us set a few longer-term goals for better measuring his achievements.

By January 1, 2021 let us take another look at where the Dow stands.

Using the 32-year compounded growth rate of the Dow (8.95%) we should expect the Dow to be at 28,001 on January 1, 2021.

Using the highest 4-year compounded growth rate from the table above, Clinton’s 1^st term, of 18.2%, we would expect the Dow to be 38,971 on January 1, 2021.

Using President Reagan’s 2^nd term compounded growth rate from the table above, we would expect the Dow to be 33,683. On January 1, 2021.

Now those are the type of benchmarks and milestones that I think we should set to measure the “true value” of this new Administration.

Oh, by the way, in case no one was looking, the Dow Industrial 30 dropped below 20,000 yesterday.

No one was tweeting however.