To bounce or not to bounce

Whether ’tis nobler to hold and suffer
the ups and downs of September’s surprises,
or dump one’s shares to try again later,
and while awaiting miss out? To buy? To sell?

…that is the question facing Biden longs as we near the conclusion of the RNC and the beginning of the Fall campaign season. (My apologies to the Bard).

First things first

Enter my contest, nerds. It’s free, there’s a $500 prize pool for this one (bigger than last time! prizes for second and third now!) and you can always copy your favorite sharp’s notes by looking at the predictions from the August 1 contest. As of this writing, only about 16 people have entered so far (entries close September 1 at 11:59pm Eastern), so your odds are good! Of course, perhaps many of you are waiting to see what that first round of post-RNC polling shows and whether we finally see The Tightening.

So is this race going to move?

One of the hallmarks of the 2020 cycle so far is that the polling margin between Biden and Trump doesn’t move that much. Of course it does drift! And has drifted towards Joe, especially in the wake of George Floyd and the south/southwest coronavirus wave. But there are no swings like the 2016 roller coaster:

Part of the reason it hasn’t moved? More people have made up their minds; fewer are undecided or considering third parties:

(y-axis is two-party share of the polling average)

Of recent cycles, 2004 and 2012 stand out for relatively similar patterns. Both high in two-party share early on. Both with relatively little turmoil in summer polling. Both occurred in the more polarized modern era, and both featured incumbent presidents on whom the election (at least in part) was a referendum.

And both cycles, as you can see above, featured late August / early September conventions that produced a sizeable polling bump for the incumbent. (Later, this bump eroded after Obama and Bush both lost their first debates, yet of course both would win in the end! One notable difference is that both had higher approvals than Trump going into the campaign season, which might explain why the races hovered around a margin of zero rather than the margin Joe has).

So here we are in August 2020, similar polling dynamics, similar incumbent convention timing, and therefore a similar bounce incoming?

Well, I don’t know. (Sorry). But I do feel like the race moving five points towards Trump in September is far more likely than it moving five points further away from him. It’s just that both tails of the outcome distribution seem far less likely than it moving say just one to three points towards Trump.

To bounce

Why might we see a small shift towards Trump? Well there’s the convention, though I honestly don’t see it doing *too* much in that regard, though partisan nonresponse might kick in for some of the live caller polls. There’s also just the time of year (perhaps the “tuning it out til now” crowd are Trumpier to begin with). Maybe coronavirus is fading and there’s a segment of the undecided electorate that have goldfish memories and/or have never really been that bothered by the deaths and have been more upset at way-of-life changes. Maybe there’s a big chunk of undecideds who really don’t care about BLM except superficially and hate protesters and unrest in general more (especially with sports gone). Maybe Joe gaffes, or maybe the media starts harping on him for getting out-hustled on the campaign trail by Trump (which does seem likely, for safety reasons if anything) in the absence of anything else to complain about.

Not to bounce

And why might the race hold steady? Because an object at rest tends to stay at rest. Because if Biden didn’t get much of a bump (except in his favorability, slightly), why would Trump, especially with a less-watched convention? Because unrest rooted in racial injustice might serve to reinforce the suburban disgust with Trump (you would be amazed, driving around lily white wealthy Boston exurbs how many have BLM yard signs – yes this is a yard sign pump). Because, yes, the low turnout non-college-educated white men do exist but if they’re not already showing up in the polls as likely to vote that isn’t going to change in September (late October, though?). Because the race is, has been, and always will be about Trump and Trump (have you noticed?) is rather unpopular.

Betting on it

So what’s the play? Well I’ve decided I actually I favor a small Trump bounce over no Trump bounce.

I’m going into September owning Trump in the bigger markets though I still hold Biden in many others (some underwater) and I still think Biden is a strong favorite to win in the end. But my playstyle is too impatient to do nothing between now and election day and if I think there’s value in a Trump shift I’m going to try collecting it. I am expecting the margin to be Biden +7 within two weeks or something, and I’ll boldly say that I would not be surprised if Trump surpassed 50c at some point in September.

And if I’m wrong? Then I’ll sell and go the other way of course 🙂

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