The Shy Voter Phenomenon

Why have election polls been getting it wrong in recent years? They used to be pretty reliable, but then we also used to have a civilised democratic society where people didn’t get persecuted for their political views. I have to admit that if a random stranger called my house phone and asked me who I was going to vote for in the next election, I’d probably tell them to "Go jump" but I understand why many people would just find it easier to lie about their intentions and play it safe. After all, if the caller has your phone number then they probably also have your address…..

In 2016 the polls were wrong about Trump. They were wrong about Brexit and in Australia in 2019 they were wrong about our Federal Election here too, so there has been a bit of a pattern emerging. One explanation that has been getting a bit more credibility of late is the Shy Voter Phenomenon and yet it still is only really used to explain why polls were wrong in hindsight. The idea that future elections might be effected by the Shy Voter Phenomenon has not really got much traction so the mainstream media has continued to trust the polls blindly.

In the USA this week we have a massive presidential election that the whole world has been talking about. Everyone has an opinion and that’s fine, I’d even go so far as to say it’s healthy! But some of the other things we have been seeing in the lead-up are really NOT that healthy. There has been civil unrest with thugs burning down things, destroying property and threatening or attacking people who have different political views….do people really think that in this environment people will be forthcoming about their voting intentions and we won’t see a Shy Voter Phenomenon this time around?

If we apply a little bit of critical thought here and look at the state of things it’s pretty obvious to me that not only are we going to see a big Shy Voter Phenomenon but we possibly might see the biggest instance of it yet. I’m not an American so I don’t have a vote and I generally don’t care who is President over there as long as they don’t start any new wars, but as an investor in a number of different things the results of this election is likely to have some kind of impact on me financially. So I’ve been looking to hedge some of my investments against this election for months….but am I now seeing a new investment opportunity staring me in the face?

I’m always on the lookout for any kind of market where the prices are wrong if I can also confidently identify the reasons why the markets are wrong. Here I can see the polls for the outcome of the US election getting it wrong and the betting markets for that election are all being based off those polls. It looks like a pretty obvious one to me. I’m not saying that Trump will win, but he’s paying 2.90 on Betfair which has got to be cracking value and earlier today I got a good chunk of cash on a +100.5 handicap in the Electoral College vote at 1.92 which looks to me like an outright steal. I’m expecting a rally in Precious Metals if Biden wins so this little side bet on the Electoral College is going to act as a bit of a hedge for me against my current holdings because if we get a close and contested election the markets might melt down a bit for lack of agreement on the next stimulus.