“In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
– Benjamin Graham
The voting machine – or popularity contest – is being won every week by Donald Trump, despite his obvious lack of command of the way the country actually works. Nobody really cares, because they’ve decided that it doesn’t work at all – at least not in their favor.
Trump is a technical analyst. He ignores the policies (fundamentals) and focuses on the polls (price). It’s a shortcut, but it’s working.
— Downtown Josh Brown (@ReformedBroker) February 27, 2016
Trump doesn’t care much for fundamentals – in the political sense, the fundamentals would be policy. His ideas about healthcare (competition!) and immigration (round ’em up!) represent first-level thinking of the highest order, although they are facile enough to be communicated in today’s 140-character size / attention span limitation.
But what he seems to have a masterful expertise in is the polls – which, in market terms, would be equivalent to price. He’s a technical analyst.
For every detail Trump couldn’t give you about defense, education, healthcare, etc, he could reel off ten hyper-specific factoids about his place in the running. He knows his margins of victory in every state primary and caucus; he drops these stats right off the top of his head. And he’s got these things broken down within age groups, racial groups and even education levels. No other candidate demonstrates this specificity with regard to the polls, and, as such, no other candidate has done as good a job at gaming them.
Technicians focus on price with the assumption that the fundamentals are old news and already being priced into the market by others anyway. Trump focuses on polls under a slightly different assumption – he doesn’t care if policy is priced in, he assumes that the electorate doesn’t care either. So far, he’s right. 2016 is a primal scream within the GOP. Policy wonks need not apply.
The voting machine is unconcerned with weighing right now. It may stay that way for a long time to come.