AGF Management : How Donald Trump Could Win Re-election

Insights and Market Perspectives

Author: 8

October 14, 2020

A QUESTION WE GET FREQUENTLY is whether Donald Trump has a chance to rally and win re-election; it's a still not out of the question despite Joe Biden's lead of about 10 points. With some pundits predicting a landslide - which we think is
unlikely - let's play devil's advocate this morning and look at how Trump could still
win . . .

The polls could be wrong: Most polltakers have improved their methodology on the composition of respondents - they get the correct mix of rich-poor, male-female,
young-old, etc. But are the polltakers correct on turnout? If it's cold and windy on
Nov. 3 in Columbus, Ohio, will lukewarm Biden supporters stay at home? The Trump base will turn out in a hurricane.

Biden's gaffes: Trump is increasingly outspoken about Biden's mental acuity, suggesting yesterday that the former vice president belongs in a nursing home. Biden occasionally says he's running for the Senate, and recently could not remember the name 'Mitt Romney,' referring to him as 'the Mormon.'

A truly damaging Biden gaffe could come in a debate, but Trump got finessed out of
participating in the second debate, which could have helped him. Trump has only one chance left; let's see if he lets Biden talk and talk in the final debate. Trump needs a major gaffe from Biden, but the president is perfectly capable of his own gaffes.

Back on Message: Instead of getting into a fight with Dr. Anthony Fauci, Trump needs to stay on message, attacking the Biden agenda as veering sharply to the left, with plenty of tax hikes. Yet Trump exasperates his aides - he seems incapable of staying on message; he rises to the bait whenever anyone attacks him.

A stimulus bill: With the economy showing signs of softening, enactment of a major stimulus bill could give Trump a badly needed victory. Nancy Pelosi knows this, and she won't listen to anyone who suggests that she should accept a $1.8 trillion deal from Steve Mnuchin.

Pelosi seemed to go off the rails in a CNN interview yesterday with Wolf Blitzer; her
restive troops want to deal, but she erupts when people like Blitzer accuse her of
stonewalling. A deal could help Trump, but most Republicans were aghast at the Mnuchin price tag; they won't accept anything close to $1 trillion, which means Trump is unlikely to get a compromise.

A Wild Card: There's still time for a geopolitical crisis or a made-for-TV event that
Trump could exploit; he's a clever campaigner - as we always say, 'you
underestimate Trump at your own peril.' But it's getting late in the game for a Hail
Mary pass.

Victory in the courts? There's little chance Trump could win the popular vote, so his best hope is that he gets close to a tie in the Electoral College; Biden's lead in the battleground states is not insurmountable. Then Trump would instruct Attorney General William Barr to litigate, taking a case up to the Supreme Court, claiming fraud in mail-in ballots.

TRUMP HAS TREMENDOUS ENERGY, and he will out-work Biden; he certainly out-worked Hillary Clinton. We think the polls will narrow, as they did in 2016. But as we wrote yesterday, this isn't 2016 - Trump has lost the fundraising battle, and he
trails badly among women and, surprisingly, senior citizens.

YET THERE'S STILL UNEASINESS among Democrats in this town when Biden gets his words mixed up, and his supporters worry that the polls could be exaggerating his lead. Trump obviously is the underdog, but here's still a chance that he could close the gap rapidly in the next three weeks.

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF's suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit AGF.com.

© 2020 AGF Management Limited. All rights reserved.