Attention to probabilities and statistics are paramount to smart investing. A recent Barron’s article Thank you Mr. O’Bama by market expert Sy Harding outlined the probability of the stock market and the economy recovering in 2009 based on the four year presidential cycle. The article states that there is a “strong tendancy for each new presidential administration to do whatever it takes to make sure the economy and market will be strong when re-election time rolls around four years later”. It goes on to show that in 19 bear markets since 1917 15 ended in the first or second year of a presidential term and both the economy and stock market recovered before the next election. Interestingly in 3 of the 4 times that the recovery did not occur before the next election the incumbent was not seeking another term. My guess is that will not be the case with President O’Bama in 2012 leading to some strong probabilities for a recovery in the first or second year of his term.