by Bill O’Grady | PDF
In this five-part series on the geopolitics of the 2020 election, we have divided the reports into nine sections. Last week, in Part III, we covered the incidence of establishment policy and the role of social media. This week, we reveal the sixth and seventh sections; we handicap the race as it stands and discuss how foreign nations are likely to intervene in the election.
Who is Going to Win?
Before we discuss our expectations of the outcome, we want to note that we analyze elections with an eye toward answering two questions. First, who is going to win? Second, what will they do once elected? In our primary role of managing money, we cannot afford to allow any political preference to distort our process as that bias could affect investment performance. And, being well ensconced in the flyover zone of the U.S., our political biases don’t matter anyway. It’s not as if our analysis affects the actual outcomes of elections. Our position is that, as a money manager, we want to know what the future looks like, not necessarily root for a certain outcome. So, here goes.
To forecast the outcome of elections, we have various factors we examine that have signaled the outcomes of previous elections. These factors are:
- The Economy
- Prediction Markets
- Base of Support
- Social Media Presence
We are also sensitive to the fact that we don’t directly elect presidents; we elect electors to the Electoral College who, in most states, vote for the president based on the majority of votes in that state. So, our focus is on determining our best estimate of the Electoral College based on polls and available decision markets, along with economic activity at the state level.