Many on Wall Street who predicted a Trump win in 2016 aren’t so sure now4 min read . Updated: 29 Oct 2020, 10:17 AM IST
- Few investors and executives got the last presidential race right. Many of those have gone quiet.
They predicted a victory for Donald J. Trump in 2016 when almost everyone else on Wall Street counted him out.
This year they aren’t quite so bold.
In 2016, a small number of well-known investors and executives, including Jeffrey Gundlach, who runs asset manager DoubleLine Capital LP, investor Carl Icahn, hedge-fund manager John Paulson and a few others made a truly contrarian bet. While pundits and others anticipated a victory for Democratic nominee Hillary Clinton, these investors predicted a win for Mr. Trump.
“The beauty of the last time is it was a hunch and I didn’t overthink it," said Jason Trennert, chairman of investment-research firm Strategas Research Partners LLC, who also anticipated Mr. Trump’s victory. Mr. Trennert’s feeling evolved from constant travel visiting clients in 45 states and interacting with locals, he said.
Now, Mr. Trennert, stuck at home in Manhattan, is less sure about Mr. Trump’s chances. “I really think it’s 50-50," he said. “If I were given odds, I would take anything better than even money." He voted for Mr. Trump in 2016 and wouldn’t say how he will vote this time.
Other vocal supporters from 2016 are more equivocal, or have gone quiet, at least about the election. Four years ago, Mr. Gundlach predicted Mr. Trump’s victory. This week, on a webcast hosted by Charles Schwab Corp., the bond-fund manager said Trump would win re-election, though he added: “My conviction that Trump is going to win is way lower than it was four years ago…This one I think is much more murky."
Others willing to make public predictions are those who have turned against Mr. Trump. In 2016, Anthony Scaramucci of SkyBridge Capital LLC, was a vocal Trump supporter and donor. He said he was struck by the support he saw for Mr. Trump as they traveled together to rallies. At the time, he viewed Hillary Clinton as a polarizing and unpopular figure.
A year later, Mr. Scaramucci joined the administration as the White House’s director of communications. His tenure ended 10 days later after the New Yorker magazine published an expletive-filled interview in which Mr. Scaramucci attacked White House top staffers.
Now a vocal Trump critic, Mr. Scaramucci expressed near-certainty the president will lose. He said Mr. Biden’s steady lead in the polls for months contrasts with the variability in polling results in 2016. In past elections, he said, steady polls were more reliable than those with variability.
“There are fewer undecided voters, Trump is a known entity and incumbents don’t win in a recession," he said, putting the chance that Mr. Trump will win at about one in 12. “This time Trump is Clinton. He’s the polarizing candidate."
In 2016, billionaire Mr. Icahn, hedge-fund managers Mr. Paulson of Paulson & Co. and Robert Mercer of Renaissance Technologies LLC all backed Mr. Trump, while sometimes raising money or donating to the campaign, or advising the candidate.
Mr. Paulson, who hosted a fundraiser this summer at his home in Southampton, N.Y., for Mr. Trump, remains a fan of the former real-estate investor.
“The president has done a tremendous job with the economy. If elected, he will make it even better," Mr. Paulson said in an emailed statement.
Mr. Paulson wouldn’t comment on which candidate has a better chance of winning the election.
Mr. Icahn, who also isn’t known to be shy with his views, attended an election-watching party in Trump Tower in 2016. After the vote, he said Mr. Trump would boost the economy. “I just think that we need change very, very badly," he said at the time. While Mr. Icahn has supported many of Mr. Trump’s actions, he decided to step away from the political arena after disagreeing with the president’s decision to enter a trade war with China, according to people familiar with the matter.
Mr. Mercer has given $264,800 to Republican candidates and political-action committees this year, including $5,600 to Mr. Trump, the bulk of the money going to the Republican National Committee, according to the Center for Responsive Politics.
By contrast, in 2016 Mr. Mercer gave $25.6 million to Republican causes, including a Trump-supporting political-action committee run by his daughter Rebekah Mercer. Mr. Mercer was the eighth-biggest political donor in that election cycle. The figures for both cycles exclude so-called dark money—donations to politically active nonprofits that don’t have to disclose their donors. Mr. Mercer declined to comment.
This being Wall Street, political prognosticators look to the stock market for clues under the assumptions that millions of traders putting their money on the line can be more reliable than individuals sharing views with pollsters.
Mr. Trennert said that of the past 14 times the stock market was up in the three months before a presidential election, the incumbent won 12 times. Until Wednesday, the market was up since August 3, bolstering confidence Mr. Trump could win, but that changed after the selloff. The market has now fallen 0.72% since Aug. 3.
Looking at the stock market-performance of specific industries also argues against a Trump win, he said. Industries that investors believe would benefit under a second term for Mr. Trump, such as financials, energy, for-profit education and for-profit prisons aren’t doing well. Industries that could benefit from a Biden presidency, such as renewable energy and infrastructure, are up recently, Mr. Trennert says.
This story has been published from a wire agency feed without modifications to the text