Could Bernie Sanders Win the Presidency?

by Greg Valliere, AGF Management Ltd.

FOR A STOCK MARKET THAT DOESN’T WORRY ABOUT MUCH, how’s this for a nightmare? A razor-thin victory by socialist Bernie Sanders this November, which most definitely isn’t “in the markets.” The overwhelming consensus on Wall Street is that Donald Trump will win re-election, possibly in a landslide.

SANDERS IS HOT: He’s headed for a comfortable win in Nevada on Saturday; the real fight is for second place. Then Sanders should do reasonably well in South Carolina on Feb. 29. Every candidate will win some delegates on Super Tuesday, March 3, with Sanders favored to win the biggest prize, California.

AN INCREASINGLY NASTY FIGHT among the moderate candidates may continue for months, helping Sanders. Mike Bloomberg’s momentum slowed over the weekend as reporters detailed his treatment of women; he apparently was quite the pig (although no one has accused him, unlike Trump, of inappropriate touching).

BLOOMBERG CONCEDES “BAWDY” behavior, but it increasingly appears that he’s an unacceptable candidate for some women, blacks and leftists who resent Wall Street billionaires. His performance in upcoming debates (starting tomorrow night) will be crucial. Bloomberg needs to drive Pete Buttigieg, Amy Klobuchar and Joe Biden out of the race, soon.

SANDERS, MEANWHILE, HAS PLENTY OF MONEY and passionate supporters; only Trump has a more devoted following. Unless someone catches fire soon (Klobuchar perhaps?) Sanders will head to the convention in Milwaukee with a plurality of delegates. If he’s denied the nomination, furious leftists will vow to sit out the November election.

SO — COULD SANDERS WIN THE NOMINATION AND THEN THE PRESIDENCY? As for the former, yes, he could become the nominee. As for the latter, the math is difficult but not totally impossible. Let’s get out the Electoral College map . .

JUST FOR THE SAKE OF ARGUMENT, here’s how Sanders could win. First, he would need the Far West: California (55), Oregon (7), Washington (12) Hawaii (4), and we’ll throw in New Mexico (5) and Colorado, a stretch, with 9. Total: 92.

THE UPPER MIDWEST: With Amy Klobuchar as his running mate, Sanders should win Minnesota (10), and perhaps Wisconsin (10) and Michigan (16). We won’t include Iowa, (6) which would be a stretch. Total: 36.

THE EAST: Let’s give Sanders New York (29), Massachusetts (11), New Jersey, a stretch with 14, Maryland (10), Connecticut (7) Rhode Island (4), Delaware (3), Vermont (3) and the District of Columbia (3). Total: 84.

THIS GENEROUS TOTAL would leave Sanders with 212 votes, which would be 58 short of the 270 needed to win. Then come two huge wild cards — Pennsylvania with 20 votes and Virginia with 13, which could get Sanders to 245 votes. Where could he find another 25 votes? Perhaps from New Hampshire (4), Nevada (6) and Iowa (6), which would give him 261 votes — still 10 votes short.

SANDERS SUPPORTERS THINK HE MIGHT HAVE A CHANCE to win Florida (29) with its huge Jewish vote, or Ohio (18) with its blue collar votes; if he could win one of those two, he would probably win the presidency. We don’t think he would have a chance in Texas (38) or North Carolina (15).

BOTTOM LINE: We’re not predicting a Sanders victory, the numbers simply don’t add up, at least not now. Actually, the candidate with the fewest perceived liabilities — Klobuchar — could more easily put together a winning electoral map. Bloomberg is still the toughest candidate to handicap — money is no object for him; could he buy 270 votes?

COULD SANDERS WIN THE PRESIDENCY? Probably no — but not definitely no. There’s a better chance that he could lose 35-40 states, but even a slim chance of Sanders winning may begin to worry Wall Street as he continues his surge past Super Tuesday.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), Highstreet Asset Management Inc. (Highstreet), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI and Highstreet are registered as portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

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.

This post was first published at the AGF Perspectives Blog.