Companies Ridiculed By Trump Outperform Those That He Praises

Ritholtz Wealth Management CIO Barry Ritholtz's "Drain the Swamp Index" shows that Trump helps companies he criticizes.

Two indexes created by Ritholtz Wealth Management CIO Barry Ritholtz have revealed that for public companies in the past two years, it is actually profitable to be disparaged by President Trump.

According to Axios, President Trump has both praised and criticized U.S. companies since his inauguration. Ritholtz has tracked the company performances relative to their relationship with Trump.

The “Oligarch Index” of companies that Trump has praised rose 20% in 2017, yet, this was behind the S&P 500’s gain of 21%. In the same year, the “Drain the Swamp Index” of companies that Trump has targeted on Twitter rose 43%.

The next year, in 2018, results were similar. The Oligarch Index plummeted 23% while the Drain the Swamp Index rose 6.3%.

In Bloomberg Opinion, Ritholtz said, “That is a 29 percent point advantage for Trump’s most-hated companies over his most favored ones. This is even bigger spread than the first year we tracked the indexes, when the spread was 23 percentage points.”

Ritholtz clarified that the index performances likely have more to do with the people who Trump likes than his comments toward the companies on Twitter.

On the “Drain the Swamp Index” Amazon, founded and run by Jeff Bezos, gained 32% this year; Twitter, whose founder refused to create a lying Hillary emoji, gained 36%; and the “failing” New York Times gained 23%.

On the Oligarch Index, Goldman Sachs fell 31%; Ford Motor fell 34%; Facebook lost nearly a quarter of its value after fueling Trump’s fake news during the presidential election; and Exxon Mobile fell 17%.

Ritholtz said, “All told, it was a rough year for the Oligarchs, with little other than huge tax cuts to comfort them.”