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Actually, there have been studies done showing their trades beat the market! It is not possible to know their exact return but the studies I've read suggest the

Actually, there have been studies done showing their trades beat the market! It is not possible to know their exact return but the studies I've read suggest they have alpha.

awinder 6y ago
I think I’m gonna have to read up a little more, but I’ve seen this in support of the excess returns view: https://www.nytimes.com/2011/07/10/business/mutfund/congressional-portfolios-outpacing-the-market-essay.html https://www.nytimes.com/2011/07/10/business/mutfund/congress... And this in support that avg congressional portfolio is not performing well: https://www.mit.edu/~jhainm/Paper/Eggmueller_CapitolLosses.pdf https://www.mit.edu/~jhainm/Paper/Eggmueller_CapitolLosses.p... https://www.morningstar.com/news/marketwatch/2020041854/senators-privileged-information-does-not-often-result-in-market-beating-returns-dartmouth-research-team-concludes https://www.morningstar.com/news/marketwatch/2020041854/sena... Looks like there might be a historical component around the STOCK act that different studies play with for their data window. In either case — I still say for the poor level of diversification within & around asset classes that I don’t see a lot of shining examples of how to achieve success.
- noahc 6y ago
  > I still say for the poor level of diversification within & around asset classes that I don’t see a lot of shining examples of how to achieve success. Wouldn't you expect a poor level of diversification in a stock portfolio based on corruption? They aren't dollar cost averaging and diversifying. They're doing the exact opposite to maximize the trade.
  - awinder 6y ago
    Kinda, I guess for a sophisticated “corruption portfolio” I would expect to see suspiciously timed trading but maybe more coherent core holdings. Just because you have inside info doesn’t mean you have a time machine, you still have to protect against unknowns.

Actually, there have been studies done showing their trades beat the market! It is not possible to know their exact return but the studies I've read suggest they have alpha.

awinder 6y ago

I think I’m gonna have to read up a little more, but I’ve seen this in support of the excess returns view: https://www.nytimes.com/2011/07/10/business/mutfund/congressional-portfolios-outpacing-the-market-essay.html https://www.nytimes.com/2011/07/10/business/mutfund/congress... And this in support that avg congressional portfolio is not performing well: https://www.mit.edu/~jhainm/Paper/Eggmueller_CapitolLosses.pdf https://www.mit.edu/~jhainm/Paper/Eggmueller_CapitolLosses.p... https://www.morningstar.com/news/marketwatch/2020041854/senators-privileged-information-does-not-often-result-in-market-beating-returns-dartmouth-research-team-concludes https://www.morningstar.com/news/marketwatch/2020041854/sena... Looks like there might be a historical component around the STOCK act that different studies play with for their data window. In either case — I still say for the poor level of diversification within & around asset classes that I don’t see a lot of shining examples of how to achieve success.

noahc 6y ago
> I still say for the poor level of diversification within & around asset classes that I don’t see a lot of shining examples of how to achieve success. Wouldn't you expect a poor level of diversification in a stock portfolio based on corruption? They aren't dollar cost averaging and diversifying. They're doing the exact opposite to maximize the trade.
- awinder 6y ago
  Kinda, I guess for a sophisticated “corruption portfolio” I would expect to see suspiciously timed trading but maybe more coherent core holdings. Just because you have inside info doesn’t mean you have a time machine, you still have to protect against unknowns.