We recently compiled a list of the Obama Stock Portfolio: 10 Year Returns. In this article, we are going to take a look at where JPMorgan Chase & Co. (NYSE:JPM) stands against the other stocks in former U.S. president Barack Obama’s portfolio.
Former United States President Barack Obama took office during one of the worst recessions in U.S. history, yet the stock market reached new highs during his tenure. Stepping into office in 2009, the year after stocks plummeted nearly 40% amid the financial crisis of 2007-2008, Obama made a remarkably well-timed market prediction. On March 3, 2009, just days before the S&P 500 hit an intraday low of 666 and a closing low of 676.53, the then-president stated, “What you’re now seeing is profit-and-earnings ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it.” By the time he left office on January 20, 2017, the S&P 500 had soared to 2,263.69, reflecting a gain of about 225% since his predictive remark.
The “Obama Years” coincided with rapid technological advancements that significantly impacted the stock market. Apple Inc.’s iPhone, introduced less than two years before he took office, exemplified this era of innovation. In addition, during Obama’s presidency, billionaire Reed Hastings transformed Netflix Inc. from a DVD rental-by-mail company into a video-streaming giant, revolutionizing entertainment consumption. On the other hand, renewable energy, particularly solar energy, struggled during the president’s tenure. Despite the administration’s solar subsidies, investors were largely disappointed as those subsidies eventually faded. First Solar Inc., one of the largest U.S. solar equipment producers, saw its stock plummet by as much as 74% due to falling solar panel prices, making it the worst-performing S&P 500 stock of the Obama era.
How Did the Obamas Make Their Money?
From speaking at events worldwide to writing memoirs and signing a major production deal with Netflix, the Obamas have led a busy and highly lucrative life post-White House. Michelle Obama’s first memoir, “Becoming,” published in November 2018, became that year’s No. 1 best-selling book. Her second book, “The Light We Carry: Overcoming in Uncertain Times,” also achieved bestseller status. Similarly, Barack Obama’s latest memoir, “A Promised Land,” sold nearly 890,000 copies within 24 hours of its November 2020 release. These ventures, along with the six-figure pension that all former presidents receive, have significantly boosted the Obamas’ net worth, which is at least $70 million according to the International Business Times. The New York Post, however, estimates their fortune to be much higher, at $135 million.
Of course, Barack Obama’s income isn’t limited to speaking fees and pensions. Like many other wealthy individuals, he has invested significantly in the stock market. So what does his portfolio look like? When he took office in 2009, Obama, like all presidents, was required to make financial disclosures by law. At that time, Obama held $200,000-$450,000 in the Vanguard 500 Index Fund Investor Shares that tracks the S&P 500 index, according to a report by CBS News.
Our Methodology
These investments were selected from the top holdings of the Vanguard 500 Index Fund Investor Shares, one of Barack Obama’s primary investments during his presidency, according to official disclosures. We have provided each stock’s trailing 10-year returns to assess their performance over the decade. Data from approximately 919 elite hedge funds tracked by Insider Monkey in the fourth quarter of 2024 was also analyzed to determine the number of hedge funds holding stakes in each firm.
Why are we interested in the stocks that hedge funds pile into? The reason is simple, our research has shown that we can outperform the market by imitating the top stock picks of best hedge funds. Our quarterly newsletter’s strategy picks 14 small and large-caps every quarter and it has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Note: The stocks are sorted in ascending order of their trailing 10-year returns.
A group of business people discussing plans around a boardroom table adorned with a financial services company logo.
JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 112
Trailing 10-Year Returns: 15.41%
JPMorgan Chase & Co. (NYSE:JPM) is a global entity operating across various sectors, including Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management.
Piper Sandler on June 14 maintained its Overweight rating and $220.00 price target for JPMorgan Chase & Co. (NYSE:JPM) following an encouraging update on the bank’s revenue expectations for the second quarter of 2024. The positive outlook was shared by Troy Rohrbaugh, co-CEO of the Commercial & Investment Bank at JPMorgan, during an industry conference where he provided revised revenue guidance for the investment banking and markets segments. This revision suggests a more optimistic outlook for JPMorgan Chase & Co. (NYSE:JPM)’s performance, prompting Piper Sandler to adjust its earnings per share estimates for the coming years. The firm’s estimated EPS for 2024 has been increased from $16.76 to $16.95, with the second quarter of 2024 EPS estimate rising from $4.54 to $4.63.
Analysts also have a positive outlook on JPMorgan’s financial performance, with a stable Return on Tangible Common Equity (ROTCE) target of 17% and an expected Net Interest Income (NII) for 2024 around $91 billion.
According to Insider Monkey’s analysis of 919 hedge fund portfolios for their fourth-quarter 2023 holdings, 112 hedge funds had positions in the bank. Notably, Ken Fisher’s Fisher Asset Management held the largest stake in JPMorgan Chase & Co. (NYSE:JPM), valued at $2.45 billion.
Carillon Tower Advisers said the following about JPMorgan Chase & Co. (NYSE:JPM) in its fourth-quarter 2023 investor letter:
“PNC Financial and JPMorgan Chase & Co. (NYSE:JPM) performed well due to more benign inflation data, which the market likely interpreted as a sign that a recession is now less likely to occur. Recall that historically speaking, banks are hyper-cyclical stocks and typically will trade lower if investors foresee a recession, because recessions tend to trigger loan losses.”
Overall JPM ranks 9th on our list of former U.S. president Barack Obama’s portfolio stocks. You can visit Obama Stock Portfolio: 10 Year Returns to see the other stocks that are on hedge funds’ radar. While we acknowledge the potential of JPM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising than JPM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Disclosure: None. This article is originally published at Insider Monkey.
