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Those of you who are slightly mystified at my constant carping about the chicanery behind "official" U.S. Statistics, I implore you to read the following:

A Primer on Government Economic Reports

Further to my previous comments about the balderdash involved in saying "it's a Presidential election year, so the markets are likely to rise", a bit of a look at the data shows a couple of things: First, it appears that since 1872, markets are a little under three times as likely to rise during an election year as they are to fall. This contrasts with the "all years" ratio of 1.74 - that is, markets rise, on average, a little under twice as often as they fall.

A Primer on Government Economic Reports

Further to my previous comments about the balderdash involved in saying "it's a Presidential election year, so the markets are likely to rise", a bit of a look at the data shows a couple of things: First, it appears that since 1872, markets are a little under three times as likely to rise during an election year as they are to fall. This contrasts with the "all years" ratio of 1.74 - that is, markets rise, on average, a little under twice as often as they fall.

The problem of

**sample size**rears its head; with so few observations for election years, it turns out that 2.67 is statistically "the same" as 1.74.No Restriction on PE | Up | Down | Ratio |

Election Years | 24 | 9 | 2.67 |

All Years | 82 | 47 | 1.74 |

When we introduce a constraint to try to account for valuation (at the

**beginning**of the year), the Presidential year ratio doesn't change very much. I've used a value of 15x 12-month trailing earnings as the hurdle, which is being pretty kind, since 15x is close to the**average**PE over the period. The "who cares what year it is" data also shows no significant change.Trailing PE > 15 | Up | Down | Ratio |

Election Years | 9 | 3 | 3 |

All Years | 32 | 20 | 1.60 |

Turns out that with so few data points (only 33 election years, and only 12 which showed even

**modest**overvaluation), there is absolutely no statistical difference between the Presidential-election and non-Presidential-election years.There have only been 2 Presidential Election years with a PE above 20; 2000 and 1992... as such even trying to perform an anlaysis of what happens in a Presidential election year with a valuation as high as we have now, is fruitless.