Embargoed by the publisher until April 2011. Full text of this item is not currently available on the LRA. \ud The final published version is available at http://www.informaworld.com/smpp/title~db=all~content=g916824822, doi: 10.1080/09603100903166189.This article documents that political factors can be linked to that part of stock prices which cannot be explained by the standard present value models. The nonfundamental component of stock market index appears to be significantly influenced by the political orientation of the president and his approval rating, election cycle and military conflicts. The findings presented here indicate that there is much more to the price formation process than the present value of future dividends
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