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Post Votes and Non-Votes; from Noah Rich
Created by John Eipper on 03/15/16 5:27 AM

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Votes and Non-Votes; from Noah Rich (John Eipper, USA, 03/15/16 5:27 am)

Noah Rich writes:

How does one determine, as Ric Mauricio did on 13 March, that a non-vote goes to the eventual winner?

Is it not just as plausible to suggest that a non-vote, if it were a real vote for the eventual winner, would be hurting the eventual winner by not being actually cast? That non-vote then reduces the margin of victory that the eventual victor has.

I'm not sure I particularly see the logic there.

That being said, your vote does count. Whether it's an informed one or an uninformed vote, and this goes even doubly for the primaries. Our voter turnouts for primaries are absolutely terrible.

So my question for other WAISers out in WAISWorld is...how do we get more people to go out and vote in the primaries?

JE comments: Great to hear from Noah Rich in beautiful Athens, Ohio. Noah--I trust you'll be casting your vote in today's Ides of March primary.  If time allows, send us a report on the mood in the Buckeye State.

My favorite promise from Governor Kasich:  he'll build a fence on the Michigan-Ohio border to protect the Ohio-speaking people.  This, according to Time's Joe Klein:


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  • Votes and Non-Votes (Michael Sullivan, USA 03/16/16 4:01 AM)

    The answer to Noah Rich's question (15 March) on increasing primary voter turnout is to run two candidates like Donald Trump and Bernie Sanders. You'll attract all the disenfranchised voters who normally don't or seldom vote!

    Republican primary voter turnout is setting records this year across the country.

    JE comments: Trump is indeed motivational, as he is bringing voters to the polls both for and against.

    Noah Rich wrote to let us know that he cast his vote in Ohio. We'll hear from Noah shortly.

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  • Votes and Non-Votes (Timothy Brown, USA 03/16/16 4:15 AM)
    Having bird-dogged many an election in other countries, I've observed that not even American voters understand how they work here. In a "winner take all" election, the winner is the candidate who receives 50%+1 or more of the votes cast. Hence, hypothetically in a state with 1 million qualified to vote, if only 10 of them vote, the one who gets 6 votes wins. The opinions of the other 999,990 qualified voters who did not vote are entirely irrelevant. This is, admittedly, a gross exaggeration intended to illustrate the point.

    Of course, in a US presidential election not even the 6 voters are guaranteed victory, since they do not vote directly for their preferred candidate, but for the members of the national Electoral College. And these electors are not necessarily legally bound to vote for the winner. So, in the end, our President is elected by winning the majority of the electors, regardless of the will of the voting minority, much less of the people at large.

    Try explaining that to a Thai or a Paraguayan!

    JE comments:  Every four years it's important to receive a refresher on this country's arcane Electoral College, which does the actual electing of a president.  If I recall my civics lessons correctly, the electors are bound to obey the voters' preference only on the first round.  If no president is elected at that time, they can then switch their vote to anybody.

    In Bush-Gore 2000, these technicalities became very important, but in the end the Supreme Court got to do the electing.

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  • Voting in Ohio; from Noah Rich (John Eipper, USA 03/16/16 6:31 PM)
    Noah Rich follows up on his post of 15 March:

    In response to John Eipper's question, I actually voted last week on an absentee ballot. I'm from the city of Hamilton in Butler County, Ohio, where I am registered.

    I can assure you with almost absolute certainty that the focus is on the Kasich vs Trump battle in Butler County. The county has voted Republican in every general election since 1972 (if not further). Who will win for each party? I haven't spent enough time there in recent months to make an informed prediction.

    Athens County, where I am at school currently, will be very different. The focus is all on the Democratic Party. In contrast to Butler County, I believe Athens County has voted Democratic in every general election since 1972 (if not further).

    Ohio University in particular seems to really be "feeling the Bern."  If there are large groups of students here who support Hillary, Trump, Kasich, or Cruz, then they have not made themselves heard.

    On the campus' biggest green today there was a small stall selling Bernie shirts, buttons, etc. I haven't seen a single stall like that for any other candidate.

    Time to wait and see the results. Whatever happens I just hope to see a higher percentage of voter participation.

    JE comments:  Noah Rich sent this post before yesterday's Ohio results came in, but the big news is Gov. Kasich's victory and (temporary) reprieve in the primaries.  Athens County certainly Felt the Bern, with 60+% of its electorate opting for Sanders (the Robert Whealey effect?), but the state ended the day solidly in the Clinton column.

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  • Non-Votes and Other Non-Actions (John Eipper, USA 03/17/16 4:24 AM)
    Ric Mauricio responds to Noah Rich (15 March):

    Ah, my Spock ears are perking up. A logic question. Noah, you are correct that if the non-vote were to have gone to the eventual winner anyway, their margin of victory would have been greater. But, of course, being a non-vote, no one knows for sure which way that non-vote would have gone if actually voted. However, there is a 50% chance that the non-vote could have gone to the eventual loser, thus reducing the margin of victory. In fact, if the 60% of the registered voters in Chicago who didn't vote had voted and 67% of those had voted for Emanuel's opponent, you would have had a tie. But because they didn't vote, their non-vote defaulted to a win for Emmanuel.

    Let's use another example of non-voting. If you see a person being beaten to death, but do nothing (calling 911?), essentially your non-action can result in the default reaction, the person is beaten to death.

    Another example is of a healthy husband and wife, who lament not having biological children. But if they did not have sex, yes, a non-vote, by default, their inaction results in not having biological children.

    In finance, we have the same issue. Many people lament that they do not have any money to live on (or to enjoy life) in their golden years. Being a person who started out with zero (unlike our friend, the Donald) and having retired at the age of 30, 40, 50 and 60 (I get bored), I counsel people that they have to take advantage of opportunities that are presented to them through life. But, alas, their inaction leads to the default setting of not having enough money to enjoy life.

    Many people point to their economic environment as an excuse for inaction. Oh, the stock market is manipulated. Oh, the economy is manipulated. Oh, taxes are too high. Oh, interest rates are too low. And all of these are true. However, one must recognize the above truisms and take advantage of the opportunities presented by those manipulations. And realize that those manipulations are made public on TV, newspapers like the WSJ, and your friendly neighborhood stockbroker. Recognize that what they are saying has one purpose, to separate you and your money.

    I just analyzed an investment that a client had gone into, compelled by his friendly financial advisor. First of all, there was a 5% front-end load, so now the client was working with only 95% of his initial capital. Next, there was a 1.42% management fee for the mutual fund. The fund was a fund of funds, meaning that every fund within the fund had an average .78% management fee. So now you have a total 2.2% in fees every year. Keep in mind that 95% of funds do not match the S&P 500 returns, but if they did (which they didn't), the funds would have to overcome the 2.2% friction (some call it drag) to match the index. Plus it had to overcome the fact that it is starting out with only 95% of his initial investment. Bottom line, in the last 3 years, the fund gained 2.21% per year (taking into account the load and management fees), while the S&P 500 gained 10% per year in the same time period. That is a 7.8% underperformance every year. But the broker and his firm is raking in the money.

    Bottom line: the client and his wife (he is an accountant; she is a professor in physics and astronomy) should have asked questions and should have taken studied the investment before investing. Their inaction has led to a losing situation. They asked me to manage their investments.  However, I told them they the best financial advisor is staring at them in the mirror ... they need to take responsibility for their actions, not lay that responsibility on someone else.

    JE comments:  Ric: you first retired at 30?  Please tell.

    I'm fond of laws and principles (Godwin, Murphy, Peter), but what's the name of the First Law of Finance, which goes something like this?  (I could look it up, but I'd rather get a discussion going.)

    You are never as careful with other people's money as you are with your own.

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