Is the change of Federal Reserve Chairman equivalent to a sharp decline in the US stock market? Please cherish next week's time? And find that golden pit before the midterm elections and dive all in? Recently, this image and the aforementioned comments have gone viral on Twitter and major US stock groups. But after careful examination, it is obvious that there is a problem with this image and the copied comments, not just with the wrong data. 1. I don't know what the maximum drawdown of 6 months here is using: A) Is the lowest point within 6 months of taking office reduced by SP500 at the time of taking office B) Subtract the highest point within 6 months from the lowest point within 6 months.. 2. Take Powell as an example. He was sworn in on February 5, 2018, and the flash crash at the beginning of 2018 occurred on January 26. According to Algorithm A, Powell's maximum drawdown within 6 months of taking office is 2.56%. According to Algorithm B, the maximum drawdown is 9.45%. All are much lower than shown in the figure. 3. Secondly, regardless of which drawdown statistical method is used, there is no significant difference between the maximum drawdown within 6 months after the Fed chairman takes office and the maximum drawdown within any 6 months in the history of the S&P 500. 4. According to the definition of drawdown A, the maximum drawdown within 6 months after the last 7 chairpersons took office is as follows: Burns（1970-02-01），19.20% Miller（1978-03-08），0.00% Volcker（1979-08-06），4.25% Greenspan（1987-08-11），32.82% Bernanke（2006-02-01），4.58% Yellen（2014-02-03），0.00% Powell（2018-02-05），2.56% The median is 4.25% 5. The maximum drawdown distribution of the S&P 500 in any 6 months is: 10% percentile, 0.09% 25% percentile, 1.44% 75th percentile, 8.98% 90% percentile, 16.24% Median, 4.12% The median of the two is almost the same. T-test p=0.2870, Wilcoxon test p=0.3438. There is no significant difference. 6. According to the definition of drawdown B, the maximum drawdown of the last 7 chairpersons within 6 months of taking office is as follows: Burns（1970-02-01），23.21% Miller（1978-03-08），17.12% Volcker（1979-08-06），13.31% Greenspan（1987-08-11），33.51% Bernanke（2006-02-01），7.70% Yellen（2014-02-03），12.38% Powell（2018-02-05），9.45% The median is 13.31% 7. The maximum drawdown distribution of the S&P 500 in any 6 months in history is: 10% percentile, 7.80% 25% percentile, 9.97% 75th percentile, 17.74% 90% percentile, 22.12% Median, 12.99% The median of the two is almost the same. p=0.5516，p=0.8854。 There was also no significant difference. 8. Overall, according to historical patterns, there is almost always a significant pullback in the US stock market within any 6 months, which is a historical norm and not surprising for the next 6 months. It can even be speculated that due to the historically high valuation of the US stock market, the future drawdown may be higher than the historical median. 9. For example, the current CAPE of the S&P 500 is as high as 39.58 times, which is in the historical 95%+percentile. Based on backtesting over the past 100 years, when CAPE is at a high historical 80-100% percentile, the median return of the S&P 500 over the next 60 months (annualized+4.32%) will be significantly lower, and the maximum drawdown (-19.40%) will be significantly higher. But the difference in the short to medium term (3-24 months) is not significant. 10. In other words, Kevin Warsh's rise to power - if more hawkish than expected - may become the trigger for a correction in the US stock market, but it does not mean that the change of chairman naturally has any asset implications. This image - whether it's data or logic - is all garbage generated by AI. --- I don't want to mock that picture, nor do I want to prove how knowledgeable I am about statistics. I just feel that in the era where AI can generate "professional looking charts" in bulk, each of us needs a more important ability: to see a chart and ask first, is the data correct. When you hear a conclusion, think about it first. Does this logic make sense. This ability is not sexy, cannot help you become rich, and may even make you miss some seemingly reasonable opportunities. But it can help you avoid many seemingly reasonable pitfalls. After all, in the era of information explosion, not losing money is more important than making money.