I maintain a proprietary model that I use to forecast major market and political events. Three days before the U.K.’s Brexit referendum when markets gave a 70% chance to a “remain” vote, I forecast the U.K. would vote to “leave” and recommended a long gold, short sterling position. The U.K. voted “leave” and subscribers made massive profits on that trade.
In the weeks and days before the November 2016 presidential election when polls and pundits were giving Hillary Clinton a 90% chance of winning, I was traveling around the world doing TV appearances forecasting that Trump would win in a close race.
Neither of these forecasts (and many others) was a lucky guess. My models give clear guidance as to what the outcome should be and why.
What are these models saying about the 2020 presidential race? Right now, the model gives Trump a 67% chance of winning reelection. That forecast is based on the likelihood of a recession before the election.
Since recession odds are 33%, Trump’s chances are the reciprocal, or 67%. Those odds should go up monthly from now on as the chances of a recession diminish as the time to the election declines.
There are other factors in the model. One of the most important is to ask whether Democrats have learned anything from their defeat in 2016. If the answer is yes, then the odds of Democrats winning go up. If the answer is no, then the odds of Democrats winning go down.
Unfortunately for Democrats, the answer appears to be no. As this article describes, Democrats are offering voters little more than continued Trump bashing. More to the point, despite his many mistakes and offensive comments, Trump comes off as genuine. He actually means what he says.
Democrats come off as scripted, calculating and tailoring their message for the progressive wing of the party rather than the broader party and the more broad electorate. There’s still time to change things up, but for now the Democrats appear to have learned nothing and therefore appear headed for a second straight defeat.
Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.