Keeping Up With the Zogbys

Every four years we get the opportunity to become our own statisticians and predictors — peering into the crystal ball and looking for answers as to who will win the next presidential election. As this has been the longest campaign cycle in our nation’s history (just over two years), we’ve had plenty of time to get our thoughts in order.

However, our instincts and beliefs get clouded with the ubiquitous nature of daily tracking polls.

FiveThirtyEight.com has done an excellent job of taking all those polls, regressing them, factoring out bias (to the best it can be done) and presenting a clear picture of what they all say. Yet, regardless of how much work you do to normalize a poll, you’ll hear naysayers shout “that poll has bias built in.” Just this morning, McCain “strategery” man Rick Davis was saying that the polls have too many Democrats (e.g. more than 45%, the historical average) in them, so they’re biased. Is it possible that the country has more people leaning Democratic than Republican for this election, and the poll is capturing true sentiment? Shocking revelation.

Of the prognosticators I know, I’d have to say my buddy David is forming his prediction the best way — rationally. If you haven’t followed his discussion, I highly suggest you do here, here, and especially here.

As for my thoughts, the election goes the way of Virginia, and Obama clears 320 electoral votes.

John McCain’s “New” Stump Speech

W the Movie

While researching W. (the movie), I came across this excellent affirmation of my beliefs:

Highest minimum approval rating during the president term in office:

John F. Kennedy holds the record at 56% (9/12-17/1963, 14% undecided).
Dwight D. Eisenhower is second-equal highest at 48% (3/27-4/1/1958, 16% undecided).
Franklin D. Roosevelt is second-equal highest at 48% (8/18-24/1939, 8% undecided).
Gerald Ford is fourth highest at 37% (3/28-31/1975, 20% undecided).

Biggest approval rating difference during the president term in office:

George W. Bush holds the record with 73 percentage points.
Harry S. Truman is second highest with 65 percentage points.
George H.W. Bush is third highest with 60 percentage points.
Jimmy Carter is fourth highest with 47 percentage points.

Highest disapproval rating:

George W. Bush holds the record with 76% (9/16-19/2008, 5% undecided, American Research Group).
Harry S. Truman is second highest, with 67% (1/6-11/1952, 9% undecided, Gallup Poll).
Richard Nixon is third highest, with 66% (1/4-7/1974, 10% undecided, Gallup Poll).
George H.W. Bush is fourth highest, with 60% (7/31-8/2/92, 11% undecided, Gallup Poll).

Buffett Steps in and Buys

Buy American. I Am.” is the headline of an Op. Ed. piece in today’s New York Times written by the Oracle of Omaha, Warren Buffett.

He writes:

I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds.

… snip …

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

I couldn’t agree more. The valuations seen in the largest of American companies are at historical lows and missing this buying opportunity, regardless of the short-term volatility, could mean leaving a tremendous amount of wealth on the table. I wouldn’t advocate Buffett’s advice for anyone with an investing horizon under 3-5 years, but the longer term return could be very impressive and lucrative.

Investors who are holding cash as a safe position right now might have a rude awakening:

Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

Buffett’s not always right, but I agree with him 100% on this issue.