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If historical data is available, an aggregated result of this could be compared to the S&P index. To see if their trades actually outperform and therefore if th
by Gys 7y ago
If historical data is available, an aggregated result of this could be compared to the S&P index. To see if their trades actually outperform and therefore if they a better traders than average, and if so, this might mean they have better info.
- systemvoltage 7y agoThat's not guaranteed. There are number of reasons one of them being by sheer chance.
- pathseeker 7y agoYes, that's the point of measuring them. There are enough senators making enough trades over time though that there should be a clear out-performance bias if they are insider trading with much significance. The whole problem with this approach though is that a smart senate inside trader (since the STOCK act) would not do these trades him/herself. They would trade inside tips to outsiders for favors instead.
- saas_sam 7y agoThere are many examples of sketchy investment behavior in the Federal government. I remember this one, courtesy of Nancy Pelosi and Visa. I thought I remembered her offloading $MMs of FB call options too just prior to railing against them, but I can't find an article on that one now that I'm looking. Link on Visa: https://www.investors.com/politics/editorials/pelosi-corzine-visa-scandal/ https://www.investors.com/politics/editorials/pelosi-corzine...
- justaguyhere 7y agoThen he joined MF Global Holdings and bagged a $14 million compensation package — including $2 million in guaranteed bonuses, regardless of performance. Jeez man, I can't even get a 1% raise, despite being a good worker in my team. 2M guaranteed, regardless of performance? What a sweet deal...
- brianwawok 7y agoBeing a worker is not how to get rich. Don’t think it ever has been.
- mikeyouse 7y agoInvestors.com is partisan garbage. They're famously the ones who wrote that Stephen Hawking wouldn't have been able to survive under the NHS and that we found yellowcake uranium in Iraq after the invasion. Their weird authorless editorials get into all sorts of 'the lizards walk among us' areas. As for Pelosi, their claim is that she killed legislation to limit swipe fees in 2007 -- in order to take part in an IPO in 2008 -- to then pass the swipe fee legislation in 2009 (which would hurt the share price now that she owned the stock)? Meanwhile she held onto the IPO stock and bought 3x at prices of twice the dollar amount of the IPO? I'd love to see someone diagram how that is meant to be sinister.
- saas_sam 7y agoNot sure about the first part, but to answer your question about the Pelosi example: The idea was that she and her husband accepted preferential access to Visa shares during IPO in exchange for delaying a bill that was set to pass by 2 years, thereby benefiting from 2 years of share price growth, not to mention a lower share price penalty given Visa had years more time to prepare for it. Did I do a good enough job articulating that without a diagram?
- mikeyouse 7y agoThat makes much more sense than they laid out.. then again there was that whole global financial crisis that happened during that time with George W. Bush in the White House, so it seems pretty implausible still? Anyway, I found a much more compelling article that doesn't end with the sentence, "The list of financial "greed" and sleaze on the left is long. What a bunch of hypocrites." https://www.thedailybeast.com/how-visa-courted-nancy-pelosi-hoping-to-forestall-swipe-fee-changes https://www.thedailybeast.com/how-visa-courted-nancy-pelosi-...
- saas_sam 7y agoYes, better article for sure, thank you.
- adamsea 7y agoIMHO we don't even need to do that, I'd bet 50% of nefarious behavior could be caught by googling for information about companies which Senators buy or sell, and seeing if there's news which would indicate they took advantage of their office (being on a committee approving XYZ, etc).
- applecrazy 7y agoAnd if they're consistently worse than the average, just execute the inverse of their trades and beat the market. :) Joking aside, I'm surprised that members of Congress have even allowed to trade on the markets, given how much inside information they know.
- ericd 7y agoYeah, seems pretty obvious that they should at least be required to do the same sort of advance scheduling of trades that execs are.
- dlbucci 7y agoI think it's actually worse than that: I think they are specifically allowed to do more insider trading than the average US citizen. I could be wrong though, I just heard that once upon a time.
- celticninja 7y agoseems like the STOCK Act should have closed that loophole, https://en.m.wikipedia.org/wiki/STOCK_Act,so https://en.m.wikipedia.org/wiki/STOCK_Act,so it's illegal we just have to see if anyone is prosecuted over it.
- nscalf 7y agoIf I recall correctly, the stock act has them regulating themselves.
- jimhefferon 7y agoIf you are surprised the I wonder if you have been paying any attention, at all.
- igonvalue 7y ago> We document that a portfolio that mimics the purchases of U.S. Senators beats the market by 85 basis points per month, while a port- folio that mimics the sales of Senators lags the market by 12 basis points per month. The large difference in the returns of stocks bought and sold (nearly one percentage point per month) is economically large and reliably positive. https://projects.iq.harvard.edu/files/gov2126/files/ziobrowski_2004.pdf https://projects.iq.harvard.edu/files/gov2126/files/ziobrows...