How To Make Money From the Institute of Election Analysis Website

      The Institute of Election Analysis was started in 1981 when Joshua Leinsdorf discovered that there is a connection between democratic elections and government policy.  Many people dispute this connection.

   Here's how the discovery was made.  Joshua Leinsdorf, the Institute's founder, had worked in New York City for the law firm of Brady and Saxe.  Robert B. Brady, a submarine veteran of World War II and hero of the Coconut Grove fire, did the election work for the Brooklyn Democratic Party organization, getting candidates on the ballot and, alternatively, knocking some off.  Bob taught Josh the nuts and bolts of elections, the mechanics, as it were.  How candidates get on the ballot, how votes are counted, etc.

   Josh fell in love with his wife, Kathy Blohm, and moved to Atlantic Highlands, New Jersey.  Knowing relatively less about New Jersey politics than New York politics, where he had been elected to Community School Board #3 on the West Side of Manhattan, Josh ran for Monmouth County Freeholder (County Commissioner) as an independent walk-through in 1978.

   Under New Jersey election law, independent candidates, as a compensation for not being listed under the Republican or Democratic columns, can choose a three word slogan to be printed on the ballot above their names.  Josh, who at that time thought the "answer" to political unresponsiveness was putting the legislatures on television so taxpayers could watch their money being spent, chose the slogan "Public Cable Television." 

   At that time, Manhattan was the only borough with cable television.  Josh ran what is known as a walk-through campaign, where the candidate gets on the ballot, but spends no money and runs a limited campaign, appearing only at debates and editorial board meetings.

   Naturally, Josh lost.  He received only 1,358 votes, compared to the winner, Harry Larrison, Jr.'s 66,903.  Larrison's Republican running mate, Ernest G. Kavalek, received 64,812 votes, 502 fewer than the leading Democratic candidate, Allan J. MacDonald.  One Republican and one Democrat was elected Freeholder, the first time in the history of Monmouth County that voters had divided their votes between the Republicans and Democrats in the same Freeholder election. 

   More significantly, however, one month after the November 1978 election, all the cable television franchises in Monmouth County were awarded.  In the spring, John Fiorino, the County Clerk was indicted on charges of soliciting bribes from prospective cable franchise bidders.  Although Fiorino's nephew testified against him, the Clerk was acquitted.  But all the homes in Monmouth County soon were able to subscribe to cable television, and with C-Span just starting, able to watch congress, if not their state legislature (which is still not televised in 2007) at work.

    Josh continued running walk through campaigns on specific issues and being remarkably successful.  With this insight between elections and policy in his pocket, he started analyzing the federal elections in 1980. 

   The reason was that in the Reagan-Carter race of that year, Carter conceded defeat before the polls in California had closed.  Ever since 1960, when Josh was 15, he had run downstairs eagerly on the Wednesday or Thursday after the presidential election, and scrutinized the 99% returns, state by state, that were listed in the New York Times.

   In 1980, however, because Carter conceded before the California polls had closed, the Times dispensed with the vote totals they normally printed.  Josh, on a hunch, and because he wanted to see the numbers, wrote to all 50 secretaries of state requesting the official canvass of the vote.  What he received in return was an avalanche of information that provided the data for the beginning of the Institute of Election Analysis.

     In 1980, it cost $50.00 to get the official results from Texas, and $35.00 to get the results from Georgia.  In Tennessee, state legislative results were not even sent into the Secretary of State, but remained in the 100 county court houses.  Today, this has all changed and the complete and official results are available on-line.  The only remnant of those bad days is that 9 states do not compile number of ballots cast, which serves as a check-sum that can prove the integrity of an election.

     While Josh was compiling the numbers in 1981, the French presidential election campaign between Socialist Francois Mitterrand and President Valery Giscard D'Estaing was going on.  Josh noticed that it was a re-run of the election seven years before between the same two candidates.  The media was uniform in its belief that D'Estaing would win re-election.  Josh, with the knowledge of his election analysis, concluded the opposite.  There was no governmental or policy reason to have a re-run of the same candidates unless the outcome was going to be different.

   So, Josh told everyone he knew, including his own father, who had long positions in French Francs and said that he was as sure as it was possible to be in predicting elections that Mitterrand was going to win the French election.  No one believed him.  Josh could have made a fortune selling the Franc short, and eventually did make a few thousand dollars on the rebound from the legislative elections that followed, but Josh is a psephologist, not a currency trader.

   This proved to Josh that the election analysis was a powerful tool.  On November 10, 2000, the Institute predicted that Bush's presidency would be a "disaster."  On March 20, 2001, the Institute published an article entitled "When Will It Be Safe to Go Back Into the Markets."  The stock market was a bad place to put money between Bush's selection in 2000 and the 2006 mid-term election when Democrats took control of Congress and Bush's wings were clipped.  The stock market has been moving inversely to Bush's poll numbers for six years.

      Now, there has been another French election.  Nicolas Sarkozy is the new president of France promising great changes.  He claims to have a mandate from the election.  The Euro has been strengthening of late, and Sarkozy's victory is not the only reason, but one of many reasons.

   Next month, the French voters will choose a new legislature.  The results will have an impact on the value of the Euro.  Careful analysis of the presidential election can give a clue to how the legislative elections will turn out.

     Economic forces do not change from day to day or week to week.  Traders, people who buy in the morning and sell in the afternoon, or buy this week and sell next, have to pay close attention to the markets, minute by minute.  This is the way hedge funds make money, by exploiting microscopic differences in markets and distorting commodity futures markets.

   Investors, on the other hand, need to take the long view.  Underlying economic forces change only slowly.  Investing, as opposed to trading, is the only way for the small guy to compete effectively with the hedge funds and huge financial institutions.  Portfolio readjustments only need to made over quarters or semi-annually, if not over years.

   The Institute of Election Analysis is offering an investment advisory service for $20 a month.  It will alert subscribers to the expected economic consequences of elections.  With British Prime Minister Tony Blair leaving 10 Downing Street at the end of June, with Nicolas Sarkozy sworn in today as president of France, with George W. Bush's ratings in the basement, and presidential elections in the United States looming next year, clearly, change is in the air.

      The only question is, which way is it going.  The French legislative elections next month give investors a chance to find out.

        To subscribe e-mail: Investor@Leinsdorf.com or call (609)688-9320 or send check to:

Institute of Election Analysis, 35 Forester Drive, Princeton, New Jersey 08540-5328

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