Here’s Everything That Can Go Wrong This Election… and How You Can Make Money No Matter What Happens
Shah Gilani|October 30, 2020
Just when you thought political division in the U.S. couldn’t get any worse, it’s about to.
And just when you thought the stock market was holding up, it’s puking.
Not only will the Presidential election likely be contested, Congressional candidates for seats in the House and Senate are likely to contest ballot counts in many of those races.
The discord, to be politically polite, is slicing and dicing stocks across all industries.
There’s a lot to cover in today’s issue, from what can and likely will go wrong, to how the next President might be chosen – and by whom and when.
But most importantly, the stock market might keep puking, and you’re going to want to be set up to make money as stuff hits the fan next week.
A Clear-Cut Victory vs. A Contested Election
Let’s face it, the chance of either Presidential candidate amassing a clear-cut victory, clear enough for his opponent to concede, is mathematically, the way I figure it, somewhere between slim and none.
So, here’s how the real math’s going to play out and how the Electoral College works:
There are 538 electoral college votes at stake. Half of 538 is 269. The winner needs 270 votes to win; that’s a simple majority, that’s the simple math.
“Electors” who vote in the college are from the 50 states and the District of Columbia.
Each state gets two electoral votes (one for each senator), and one vote for each Representative they have. There are 435 seats in the U.S. House of Representatives; states are apportioned House seats according to populations.
That’s 535 electoral college votes for the states, plus D.C.’s 3 votes, equals 538 votes.
First to 270 votes wins.
The slate of electors to the Electoral College are chosen by their State Legislatures, and they can be all Democrats or all Republicans. They’re supposed to cast all the State’s electoral votes for whomever wins the popular vote in their State. That’s why state legislatures can have two sets of electors, and depending on who wins the popular vote in their State, they send the electors from that candidate’s party to cast all their electoral votes for them.
They’re supposed to cast all their votes for who wins the popular vote. But they don’t have to. An elector who casts their vote for anyone else is called a “faithless” elector.
It happens; it happened in 2016. But in the few cases of faithless electors throughout our history, their votes didn’t make any difference in any election outcome.
Will this time be different?
Maine, which has four electoral votes, and Nebraska, which has five electoral votes, are the only two states that do not follow the winner-take-all method. The have their electors vote based on congressional district outcomes. Their votes are important but have never decided an election.
What most people don’t know is the Electoral College meets to cast its votes on the Monday after the second Wednesday in December.
That’s December 14 this year. That’s when they cast their votes.
Even popular voting in each state points to who will take all that State’s electoral votes on December 14, 2020. Faithless electors could change that.
It’s highly unlikely, but possible.
The time between Election Day and December 14, 2020 gives contestants time to litigate their claims of ballot-stuffing, voter-suppression, miscounting, and on and on and on.
We already know we probably won’t have an outcome on Tuesday night or shortly thereafter, because at least two “swing states,” Pennsylvania and North Carolina, have given themselves three days and thirteen days, respectively, after Tuesday to collect mail-in ballots, see if they’re postmarked on Election Day, and count them.
Lastly, at least for now, whatever happens between Election Day and December 14, when the Electoral College votes there still could be a tie, or no winner of 270 votes.
If that happens, the House of Representatives votes on the outcome.
But it will NOT be the sitting House; it will be the new House elected to the new Congress that votes.
Which is problematic enough, but what if House races are contested and there are undecided seats in the House when they’re supposed to vote? It could happen.
See Where This Could Go?
Wherever it goes, maybe to the Supreme Court, it has to be figured out by January 20, 2021, Inauguration Day, the day the President is sworn in. The day of government transition.
Into all this uncertainty, the stock market, which hates uncertainty, will be open for business.
Investors will likely continue selling if there’s no stimulus coming, which there may not be if there isn’t a functioning government. Investors are already afraid, because they already see COVID-19 spikes, and expect the economy will slow dramatically if there are closedowns and lockdowns, and no stimulus to combat what could be an ugly double-dip recession. That’s a lot of weight on the market’s shoulders.
But that’s okay with me – because the market selling off is a buying opportunity, for sure. Actually, there are two ways you can play the upcoming volatility:
First, and I know what you’re going to say, but hear me out – startups are known to THRIVE in crises. And, contrary to trading on the public markets, chaos and uncertainty are a startup investor’s best friend.
And listen, I know you’ve heard the stats. People are being told that because of COVID, startup valuations have dropped near 40%, and that now is the WORST time to be a startup investor.
But that’s exactly why now is the best time to invest in the startups that are actually thriving.
And right now, one of the leading experts in startup investing has not one, not two, but SIX startup investing opportunities that have more potential than he’s ever seen before – and trust me, these deal recommendations wouldn’t have even shown up on his desk without the thorough clearance done by the independent research team.
You don’t want to be the one who missed out on what could be one of the biggest moneymaking opportunities of a lifetime.
Second, I’m buying into stocks I want to own starting now. I’m going to apply 20% of the money I’m allocating to each new position now and add another 20% every time the market or the stocks I want to own drop another 5%.
If I’m lucky, though it will be unlucky for a lot of people who sell into this correction, and the market drops 20%-25%, I’ll end up owning a lot of great companies at great prices I’ve averaged-down into.
You might want to play what could go wrong with the election the way I’m going to play the market
That way, you’ll catch its next direction… which will be UP!
Sincerely,
Shah