15 Minutes of Fame

The competition for popularity, attention, and eyeballs is a way of life in the public sphere and always has been. The advent of personal branding has only put the “look at me” phenomenon on steroids. It has never been easier for a meteoric rise to take place in pop culture, politics, or business considering how quickly we can adopt the next big thing over social media. Andy Warhol may have been right about 15 minutes of fame, but he may not have expected it to take 10 minutes to get there.

This is the first of two notes about popularity and how it applies to high profile fields: Politics and Investing.  Today, I will start with a comment on the biggest popularity contest that is taking shape now: the 2020 Presidential Election. Recently, 20 candidates took the stage for the Democratic primary debates and we are all trying to predict what this means for the election 16 months from now. Popularity can be fickle, we should be cautious in drawing conclusions too soon.

One of the best popularity barometers in the last several decades is, of course, Saturday Night Live.  One of my favorite political skits ever on the show is from November of 1991 entitled, Campaign ’92: The Race to Avoid Being the Guy Who Loses to Bush.  The bit was such a unique snapshot in time because it was both funny and way-off in its reading of the political future. It features a debate between five potential Democratic presidential nominees trying not to be the “chump” who would lose to a very popular George H.W. Bush in 1992. The incumbent was riding a wave of popularity in the aftermath of the Persian Gulf War and was seen as an inevitable two-term president.  Not to be.  Here are some interesting points from the skit:

  • The joke is that no one wants to be the one to lose, so they won’t run. Best quote: “I have mob ties” -Mario Cuomo (Played by Phil Hartman).
  • It was filmed only 12 months from the general election and no one had clarity on who any of the front runner(s) were.
  • The issue that would decide the election, the economy, did not come up.
  • The eventual winner, one of the most significant political figures of the next 30 years (Bill Clinton) was not on the stage or mentioned at all.

It is hard to predict election outcomes, as we were all reminded in 2016 with both the U.S presidential election and Brexit.  This is even harder when the candidate pool is as large as it is early in the game. The real epiphany is that sometimes, like in 1992, we can’t even predict the issues that will end up being decisive in the near term.  Can’t pick the candidates. Can’t pick the issues. Can’t pick the winner. The only thing we know for sure is who is popular in the moment. That’s pretty shaky ground.

Investing based on which party or candidate will win is challenging because the conditions on inauguration day often dictate more of a President’s agenda than campaign speeches.  For example, when Barack Obama declared his candidacy in 2007, the U.S. economy was still 7 months away from the Great Recession that would define many of the early policy decisions of his administration. The market results for a President will come from a combination of their policies and the cards that they are dealt.

In elections, the vote only counts once, unlike the markets where the voting system operates each day.  We can buy today and sell tomorrow if we like.  This makes political outcomes hard to predict because voting is akin to a popularity snapshot.  It is important to stay informed of the candidates’ issues and attributes, but be mindful that popular opinion can sometimes overwhelm the fundamentals. More on fundamentals and popularity when we talk investing next week….