7 ms·
This is also unlikely to work because Congress members don't do particularly well on trading. It's very hard to trade successfully, even with insider informatio
by bko 5y ago
This is also unlikely to work because Congress members don't do particularly well on trading. It's very hard to trade successfully, even with insider information its not entirely obvious what a stock price will do. It seems obvious because news media often reports ad-hoc analysis on a stock price movement. For instance, they'll say "Apple up 5% based on surprising App store revenue growth", but if it were to drop you may read a headline saying "Apple down 5% based on surprising drop in Mac sales". Sometimes I'll see an article touting the growth and only see it go back down by the time I get around to reading it.
I've analyzed the trades of US Senators during the early pandemic [0] and I was not convinced they performed abnormally. And the trade amounts were relatively small. I think they'd have an easier time trading real-estate due to the connections they have with various regulatory bodies and local governments.
[0] https://mleverything.substack.com/p/analyzing-us-senators-stock-picks-e8106bbbe8e https://mleverything.substack.com/p/analyzing-us-senators-st...
- DevKoala 5y agoEhh, Nancy Pelosi beats most hedge fund managers consistently year over year. https://unusualwhales.com/i_am_the_senate/pelosi https://unusualwhales.com/i_am_the_senate/pelosi
- aborochoff 5y agoThis looks to me to be just for 2020. Is there more analysis somewhere showing it’s consistent?
- cronix 5y ago* Nancy Pelosi's husband, Paul Not saying she didn't give him info, but she didn't do the actual trades. He's an investment manager. > Paul Pelosi, investment manager and the husband of House Speaker Nancy Pelosi, purchased up to $11 million worth of mega-cap tech stocks in May and June, according to a financial disclosure form filed last week. https://markets.businessinsider.com/news/stocks/nancy-pelosi-husband-buys-millions-4-mega-cap-tech-stocks-2021-7?op=1 https://markets.businessinsider.com/news/stocks/nancy-pelosi...
- qwertyuiop_ 5y agoHe has magical superpowers and just happens to be the husband of a policy maker that drives trillions in government spending.
- jasonwatkinspdx 5y agoRoughly 9 out of 10 hedge funds fail to beat the market or simple passive strategies indexed to it. I'm no fan of Pelosi personally, but observing her husbands performance isn't smoking gun evidence, it's just banal. Also, consider that a lot of what hedge funds offer is bespoke risk profiles to high net wealth individuals that are overexposed to particular market sectors.
- the_optimist 5y agoThis is wrong on all levels. Banality and evidence don’t sit across a spectrum. Hedge funds largely don’t offer sector exposure for balancing purposes in the general, and neither in this specific case. Paul Pelosi runs a diversified investment portfolio, not a hedge fund.
- deleted 5y ago[deleted]
- Ekaros 5y agoI think this has probably been one of the worst times to compared hedge fund performance to other strategies. Let's see if the corrections happen for real and then calculate those returns. After all market was or is at all time high.
- hogFeast 5y agoWe have already seen it. In 2020, you saw macro funds (the ones often targeted for "underperforming") that were running max drawdowns of 5% make 20%, 30%, 40% in a few months. The issue, as you imply, is that in a bull market people lose almost all ability to exercise reason and view the opportunity cost of capital as the S&P. But a lot of hedge funds aren't running high levels of beta, and investors in their funds don't demand that (unf for some hedge funds, who demanded low vol and then went into index funds when beta did well). And, ofc, most equity hedge funds have had very strong performance. All the Tiger group hedge funds have private companies, everyone owns tech companies, you are even seeing value hedge funds in FAANG stocks...it is quite something.
- lostcolony 5y agoYeah, but take the random trades of 435 people and a normal distribution is still going to have a top (and bottom!) outlier. It's certainly reasonable to assume an investment manager (her husband, who is making most of the trades) might be part of the reason to be such an outlier. And even discounting that and looking for shenanigans, well..."she timed buying NFLX almost perfectly" with a purchase a month before it was announced they were going into the video game space; why the heck would she have known that? That isn't related to legislation, that isn't something they would have gone to the government for; that would be a purely business decision by Netflix. How the heck would she know about it?
- hanniabu 5y ago> why the heck would she have known that? That isn't related to legislation Who knows, maybe insider info they can trade on is a form of bribery and getting a congressman's ear.
- emkoemko 5y agohow about people in these positions shouldn't be trading... if i was in power i would think people would assume i am corrupt if i did trade.
- lostcolony 5y agoI mean, I'd be all for politicians having to put any investment money into blind trusts, sure. But that's different than saying they're insider trading.
- deleted 5y ago[deleted]
- Galanwe 5y agoReturns alone mean nothing to evaluate an investment strategy against an other. At the _very_ least you would need to compare with the same level of volatility.
- kesselvon 5y agoYeah, most hedge fund managers are also absolute trash though.
- caublestone 5y agoPaul Pelosi acted on insider info back in 07. I’ve wonder what his position in the market was when Henry Paulson was on his knees begging her to TARP. https://www.reuters.com/article/us-usa-congress-insidertrading-idUSTRE81700720120208 https://www.reuters.com/article/us-usa-congress-insidertradi... https://money.usnews.com/money/blogs/the-inside-job/2008/09/26/hank-paulson-kneeling-before-pelosi https://money.usnews.com/money/blogs/the-inside-job/2008/09/...
- drited 5y agoThat Reuters article you referenced does not say that he traded on insider information. It says that Paul Pelosi may have gotten access to an IPO based on Nancy's position (although that is disputed by Pelosi who says that access was applied for in the standard manner through his broker). That's very different from insider trading.
- ezconnect 5y agoCongress is buying options not actual stocks. They bet on where it might go and they know where it might go if they have inside information. The only time they will get a big loss is if they are too greedy.
- avs733 5y agoIt could also very possibly be that your distribution isn’t one population but two. Embed a small over performing population within a larger normally performing /underperforming population. You don’t j ow who’s cheating, you don’t know when they are cheating, and if they were cheating I can’t imagine they would do it in their public funds. A simplistic analysis of self-reported data is not strong evfidence to me in this case.
- dehrmann 5y agoDrug approvals, legal settlements, and getting acquired usually send a stock higher. Buying a company usually sends it lowers. With earnings, even if you know it in advance, you're trading against what the street thinks, not even what analysts estimate, and the wrong few off-the-cuff words in the earnings call can derail your trade completely.