October 20, 2024

For stocks, bonds and other securities, there are two main approaches to evaluating investments and making trading decisions: technical analysis and fundamental analysis. See Investopedia.

The same can be said for political analysis and election forecasting.

All is well when technical and fundamental analyses agree and when the political wisdom of the pundits aligns with data from polls and prediction markets. As things stand today, technical and fundamental analyses are not in alignment.

On October 20, Trump has a lead in The Virtual Tout® technical analysis, while fundamental analysis tells a different story.

Fundamental analysis draws parallels between what is happening today and previous elections. Much of what we know about past elections points to a Democratic victory for the 2024 presidential election culminating on November 5, 2024.

In his Keys to the White House, Allan Lichtman (2024) predicts a victory for the incumbent Democratic Party, and he is sticking with his prediction. Lichtman takes a fundamental approach to election forecasting. And, as Lichtman says in a NewsNation interview from October 7, he does not change his predictions based on polls.

On October 2, we described a machine learning analysis of historical factors, suggesting that the Harris/Walz ticket has an 74% chance of winning in the Electoral College. This is technical analysis in support of fundamental analysis.

As early as August 5–11, we identified similarities between 2024 and 1964. Donald Trump, a radical, right-wing Republican candidate, is running against Kamala Harris, a center-left Democratic candidate. In 1964, the Democratic ticket lead by Lyndon Johnson won decisively with 61.1 percent of the popular vote and 486 Electoral College votes. His opponent, Barry Goldwater, a radical far-right Republican senator from Arizona, won his home state and a few states in the deep South, for a total of only 52 Electoral College votes.

The Democratic Party referenced Goldwater in its 1964 campaign slogan, “In your guts you know he’s nuts.” Johnson struck a blow to Goldwater’s campaign in his infamous Daisy Ad: “We must either love each other, or we must die.” Should Democrats take a hard-hitting “Daisy Ad” approach to win in November?

Fundamental analysis of candidate speech suggests a Democratic victory. On the campaign trail throughout October, Kamala Harris has proven to be substantially more effective than Donald Trump. The October 19 news posting points to Harris’s talent as a communicator.

Campaign messaging matters. On September 12, the front page of The New York Times summarized messaging from the presidential candidates:

• To Trump, U.S. Is Failing.
• To Harris, There’s Hope.

Proponents of fundamental political analysis suggest that voters prefer positive over negative messages. Hope wins over despair. Democrats are delivering a message of hope, and their messaging is backed up by the data.

What evidence does Trump have that the U.S. is failing? Most economic indicators are positive, as discussed as early as July 20. Inflation has now fallen to the lowest level in three years. Unemployment rates have been low. Stock markets are at all-time highs. And crime rates are lower than they were under the Trump administration.

Traditional, fundamental campaign advice suggests that candidates must move toward the political center to win the general election. In a recent interview on Hamodia, we were asked, “What do you think each candidate can do to improve his/her chances?” We replied, “Trump needs to be less focused on Harris’s identity. To make this election about race or gender is a mistake. He needs to broaden his base, move beyond white males, and be more open to the diversity of America.” Download the complete interview.

Trump has not moved to the center. Instead he has demeaned others. His words are divisive, hateful, and even cruel. Trump talks of “the enemy within.” If elected president, he claims that he would deport millions of immigrants, investigate his political adversaries, and suspend the licenses of certain news organizations. Trump is focused on the MAGA base alone, even to the point of adopting a fascist agenda.

Harris, on the other hand, has welcomed all citizens into the Democratic fold, regardless of ethnic background or previous political affiliation. She aspires to be a president for all the people.

Fundamental analysis suggests that Harris’s centrist strategy will win over Trump’s extremist, far-right strategy.

Having a president with fascist tendencies is not a bright prospect. As we pointed out on July 17, it can happen here.

Before Trump, it would have been unthinkable for a presidential candidate to reject the United States Constitution, separation of powers, freedom of speech, and freedom of the press. No one else running for president would ever claim that he is above the law.

Trump’s actions on January 6, 2021, seem disqualifying. In the New Yorker of February 17, 2020, Mitt Romney said: “Corrupting an election to keep oneself in office is perhaps the most abusive and destructive violation of one’s oath of office that I can imagine.” Hundreds of Republican’s have rejected Trump’s 2024 presidential bid, and many have endorsed Harris for president.

Trump’s message is far from the political mainstream. It has been negative, even anti-American.

Trump has revealed himself to be unstable and unable to accept criticism. A convicted felon, a failed businessman, and an abuser of women, Trump has the trappings of a flawed candidate. In the August 26–31 news posting we asked, “Will Trump’s personality be his undoing?”

Character matters to voters. Harris wins on character.

Candidate likeability matters to voters. Most people would agree that Harris beats Trump on likeability.

These considerations and others were discussed on The Coffee Klatch of October 19, 2024:

The Coffee Klatch discussion between Robert Reich and Heather Lofthouse pointed to the dangers of a second Gilded Age, with the US Supreme Court espousing principles such as “money is speech” and “corporations are people” from Citizens United v. FEC, as well as “the president can be above the law” from Trump v. United States.

The last two weeks of an election call for closing arguments from the candidates for president.

Fundamental analysis suggests that Kamala Harris will have a strong closing argument.

Books Illustrating Fundamental Political Analysis #

• Lichtman, Allan J. 2024. Predicting the Next President: The Keys to the White House (2024 Edition). Lanham, Maryland: Rowland & Littlefield. [ISBN-13: 978-8881800710] Publisher Link.

• White, Theodore H. 2010. The Making of the President 1964 (Reissue Edition). New York: Harper Perennial/HarperCollins. (ISBN-13: 978-0061900617) Publisher Link. Initial edition published in 1965.

As we approach November 5, The Virtual Tout® will do what have been doing throughout this election season: Following the data and leading with science.

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