Our Monthly Update on the Democrats’ Race — Buying Mythical Puts and Calls
Author: Greg Valliere
June 11, 2019
LET’S HAVE SOME FUN THIS MORNING with our monthly standings, combined with the following concept: which candidates are worthy of “calls” — a bet that they’re on the rise — or “puts” — a bet that they’re sliding. Here goes:
10. John Yang and the field: He’s one of a handful of long-shots worthy of buying a few mythical calls, along with Reps. Tim Ryan and Seth Moulton. Other long shots, such as Sen. Kirsten Gillibrand and former Colorado Gov. John Hickenlooper, seem to be going nowhere.
9. Julian Castro: Definitely worth buying some mythical calls on the only Hispanic candidate in the race. He’s good on TV and hits all the progressive buttons. A potential VP running mate.
8. Amy Klobuchar: She’s betting the ranch on Iowa and could emerge from the caucuses in the top tier, but her campaign seems to be stalled right now. We’re buying a few mythical puts.
7. Kamala Harris: She hasn’t been able to stand out in the 23-candidate field, and her campaign is slumping. The smart money was buying mythical puts on her for the past few months; she could come roaring back later this year, but it’s not time to yet to envision a comeback worthy of buying calls.
6. Corey Booker: An improving candidate, likely to stay in the top tier, so maybe we’d buy some mythical calls. But it’s still difficult to see where Booker finds a major opening.
5. Beto O’Rourke: After a very slow and unfocused start, he decided to re-boot, and suddenly there are signs of life. O’Rourke still polls poorly in Iowa and throughout the country, but he’s showing real fire and charisma in TV interviews and town hall meetings — he has an edgy energy that so many candidates lack. We’d unload all the mythical puts we bought on him during the winter; time to buy calls — this guy could catch fire in such a weak field.
4. Pete Buttigieg: Buying mythical calls on him during the winter would have been a brilliant move, because the 37-year-old mayor of South Bend has become a sensation — the most articulate and interesting candidate in the race. He hasn’t peaked yet, so we’d probably buy mythical calls on him for another month or two.
3. Bernie Sanders: Our sense is that Sanders, 77, may lose the battle of progressives to Elizabeth Warren. He doesn’t seem to have the energy that he showed in 2016, and voters may want a fresh face. Time to buy mythical puts.
2. Elizabeth Warren: We got pushback when we said a month ago that she was in second place, but suddenly she’s the hot policy wonk, worthy of a few mythical calls. Warren has a first-rate staff in Iowa, where her standing continues to rise as she bashes “unpatriotic” corporations. She will be in this race for a long time, and at the very least Warren will be a power broker if the convention is deadlocked.
1. Joe Biden: Load up the truck with mythical puts on Biden, who’s fast becoming a pinata in the party. Off to a slow start in Iowa, out of the limelight most of the time, and at odds with party progressives, Biden is the shakiest front-runner in memory. He might get a wave to sympathy over the despicable whispering campaign by Fox talk show hosts, who allege that he has health problems. Trump will pile on against “Sleepy Joe,” so the former VP needs to kick some butt and show some fire. We’re waiting — let’s check out his energy level in Iowa today.
BOTTOM LINE: The polls show Democrats want a candidate who can beat Trump; that’s their clear priority, not adherence to a populist laundry list. So Biden, with excellent prospects in Pennsylvania and Michigan, is still the front-runner. But there’s a generational divide in the party, a desire for someone fresh. Despite their lack of gravitas, O’Rourke and perhaps Buttigieg have a clear opening.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI is registered as a portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
© 2020 AGF Management Limited. All rights reserved.
