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Before the STOCK Act passed, Congress outperformed the market by 20%, with some senior Republican leaders doing as well as 35% [0,1]. Before the pandemic began

Before the STOCK Act passed, Congress outperformed the market by 20%, with some senior Republican leaders doing as well as 35% [0,1]. Before the pandemic began in the US, 4 US Senators were picking up medical stocks after closed-door briefings. Investigations were opened by the DOJ, but they were all dropped. [0] https://www.theatlantic.com/ideas/archive/2020/03/congress-insider-trading-problem/608488/ https://www.theatlantic.com/ideas/archive/2020/03/congress-i... [1] https://onlinelibrary.wiley.com/doi/10.1111/fire.12180 https://onlinelibrary.wiley.com/doi/10.1111/fire.12180

ckardat123 5y ago
If anyone is interested, I've been building dashboards that display trades made by U.S. congressmen and estimate their returns over time from their trading while in office. https://www.quiverquant.com/sources/senatetrading https://www.quiverquant.com/sources/senatetrading https://www.quiverquant.com/sources/housetrading https://www.quiverquant.com/sources/housetrading One weakness of the performance visualization is that some of the most extreme results are from people who have only made one or two trades while in office, as their returns are more volatile off of those few transactions.
- Emma_Goldman 5y ago
  Very cool. It would be good if you could overlay Congress' returns with the returns of the market, or a median institutional investor, for comparison. Also, to disaggregate investments by asset class, active/passive funds, etc., so we can really figure out what's going on. Those things make a big difference. I realise this is a passion project though, and that's probably too much work.
- nielsbot 5y ago
  What’s the lag time on congressional trade reporting? Too bad it’s not fast enough for me to make the same trades. (And would it be considered insider trading then?)
- vdalal 5y ago
  https://housestockwatcher.com/ https://housestockwatcher.com/ & https://senatetockwatcher.com/ https://senatetockwatcher.com/ ref: NPR article https://www.npr.org/2021/09/21/1039313011/tiktokers-are-trading-stocks-by-watching-what-members-of-congress-do https://www.npr.org/2021/09/21/1039313011/tiktokers-are-trad...
- quickthrowman 5y ago
  > and estimate their returns over time from their trading while in office. Sorry, but there is no possible way to do this with any sort of precision or accuracy with a 45 day lag time on reporting trades.
  - nzealand 5y ago
    The disclosures include the date the trade was made. The only ambiguity is the amount invested. Also, estimate <> precision or accuracy :)
- nzealand 5y ago
  Does it measure performance vs the market? E.g. If I followed Nancy Pelosi's disclosed trades on the day that she disclosed them in accordance with her minimum allocations, I would outperform S&P 500 by 7.7% pa? Btw, I think something is wrong with your calculations for Derek Kilmer. The poor chap is trading index funds and somehow is performing worse than just about anyone else.
neom 5y ago
Is there a Congress ETF?
- deleted 5y ago
  [deleted]
- nine_zeros 5y ago
  Whoa whoa slow down there, what are we, a free market? That's only for HNWI and hedge funds.
  - dragontamer 5y ago
    Free markets do not necessarily mean that everyone has equal access to information. We've got market regulations so that less sophisticated retail investors have a chance against the more sophisticated / secretive groups with more money / knowledge / power than us. A laissez-faire market would encourage secrets as a means to protect ones own capital. To force some people to give up secrets (ie: regulations against insider trading) is itself, a regulation, that already moves us away from truly free markets. Which is a good thing. I think a laissez-faire market is naive. There's benefits to free markets, but also downsides. We as a society should try to build systems where we get the benefits of free markets, but place regulations on the behaviors that cause societal harm. These rules and regulations we as a society follow (and ideally enforce) have problems. But the way to fix things is to improve the rules so that they're fairer and more comprehensive. Maybe some rules are too hard to be enforced and should be tossed away (even if in a hypothetical perfect world, they'd be net-beneficial... if its too hard to implement or enforce, then there's no point in practice). "Insider Trading among Congressmen" is more of the latter IMO. We all would like it if Congressmen played by the same rules we did. But in practice: how would we even write a law that hampers this behavior from Congressmen? Who will keep track of which stocks Congressmen are trading, and which committees they are a part of? If we can't enforce the rule, then the rule doesn't exist (even if we write down the law into our code or even the Constitution, without enforcement, the law is meaningless)
    - nine_zeros 5y ago
sp_nster 5y ago
Good stuff. I'd be interested in sorting that by stock to see what stocks they (including their spouses/sig-oth) all are purchasing.
max46 5y ago
I don't think the stocks liquidations at the beginning of the pandemic is a good example of this. shit was hitting the fan and cities were closing down before most of the "insider trading" happened. If the information they used to make their trades was on the front page of every newspaper, it's not insider trading. I think the conflict of interest alone should be enough to ban them and their close relatives from trading individual stocks
Lammy 5y ago
Not just congresspeople: https://www.wsj.com/articles/bezos-other-corporate-executives-sold-shares-just-in-time-11585042204 https://www.wsj.com/articles/bezos-other-corporate-executive... “Top executives at U.S.-traded companies sold a total of roughly $9.2 billion in shares of their own companies between the start of February and the end of [the second week of March 2020]”
morpheos137 5y ago
Honestly it was super clear to me by late January or early Feburary 2020 that the pandemic was a big deal. I had no closed door briefings and I have no political connections. I am just a smarter than your average bear critical thinker I guess.

ckardat123 5y ago

If anyone is interested, I've been building dashboards that display trades made by U.S. congressmen and estimate their returns over time from their trading while in office. https://www.quiverquant.com/sources/senatetrading https://www.quiverquant.com/sources/senatetrading https://www.quiverquant.com/sources/housetrading https://www.quiverquant.com/sources/housetrading One weakness of the performance visualization is that some of the most extreme results are from people who have only made one or two trades while in office, as their returns are more volatile off of those few transactions.

Emma_Goldman 5y ago
Very cool. It would be good if you could overlay Congress' returns with the returns of the market, or a median institutional investor, for comparison. Also, to disaggregate investments by asset class, active/passive funds, etc., so we can really figure out what's going on. Those things make a big difference. I realise this is a passion project though, and that's probably too much work.
nielsbot 5y ago
What’s the lag time on congressional trade reporting? Too bad it’s not fast enough for me to make the same trades. (And would it be considered insider trading then?)
vdalal 5y ago
https://housestockwatcher.com/ https://housestockwatcher.com/ & https://senatetockwatcher.com/ https://senatetockwatcher.com/ ref: NPR article https://www.npr.org/2021/09/21/1039313011/tiktokers-are-trading-stocks-by-watching-what-members-of-congress-do https://www.npr.org/2021/09/21/1039313011/tiktokers-are-trad...
quickthrowman 5y ago
> and estimate their returns over time from their trading while in office. Sorry, but there is no possible way to do this with any sort of precision or accuracy with a 45 day lag time on reporting trades.
- nzealand 5y ago
  The disclosures include the date the trade was made. The only ambiguity is the amount invested. Also, estimate <> precision or accuracy :)
nzealand 5y ago
Does it measure performance vs the market? E.g. If I followed Nancy Pelosi's disclosed trades on the day that she disclosed them in accordance with her minimum allocations, I would outperform S&P 500 by 7.7% pa? Btw, I think something is wrong with your calculations for Derek Kilmer. The poor chap is trading index funds and somehow is performing worse than just about anyone else.

neom 5y ago

Is there a Congress ETF?

deleted 5y ago
[deleted]
nine_zeros 5y ago
Whoa whoa slow down there, what are we, a free market? That's only for HNWI and hedge funds.
- dragontamer 5y ago
  Free markets do not necessarily mean that everyone has equal access to information. We've got market regulations so that less sophisticated retail investors have a chance against the more sophisticated / secretive groups with more money / knowledge / power than us. A laissez-faire market would encourage secrets as a means to protect ones own capital. To force some people to give up secrets (ie: regulations against insider trading) is itself, a regulation, that already moves us away from truly free markets. Which is a good thing. I think a laissez-faire market is naive. There's benefits to free markets, but also downsides. We as a society should try to build systems where we get the benefits of free markets, but place regulations on the behaviors that cause societal harm. These rules and regulations we as a society follow (and ideally enforce) have problems. But the way to fix things is to improve the rules so that they're fairer and more comprehensive. Maybe some rules are too hard to be enforced and should be tossed away (even if in a hypothetical perfect world, they'd be net-beneficial... if its too hard to implement or enforce, then there's no point in practice). "Insider Trading among Congressmen" is more of the latter IMO. We all would like it if Congressmen played by the same rules we did. But in practice: how would we even write a law that hampers this behavior from Congressmen? Who will keep track of which stocks Congressmen are trading, and which committees they are a part of? If we can't enforce the rule, then the rule doesn't exist (even if we write down the law into our code or even the Constitution, without enforcement, the law is meaningless)
  - nine_zeros 5y ago

sp_nster 5y ago

Good stuff. I'd be interested in sorting that by stock to see what stocks they (including their spouses/sig-oth) all are purchasing.

max46 5y ago

I don't think the stocks liquidations at the beginning of the pandemic is a good example of this. shit was hitting the fan and cities were closing down before most of the "insider trading" happened. If the information they used to make their trades was on the front page of every newspaper, it's not insider trading. I think the conflict of interest alone should be enough to ban them and their close relatives from trading individual stocks

Lammy 5y ago

Not just congresspeople: https://www.wsj.com/articles/bezos-other-corporate-executives-sold-shares-just-in-time-11585042204 https://www.wsj.com/articles/bezos-other-corporate-executive... “Top executives at U.S.-traded companies sold a total of roughly $9.2 billion in shares of their own companies between the start of February and the end of [the second week of March 2020]”

morpheos137 5y ago

Honestly it was super clear to me by late January or early Feburary 2020 that the pandemic was a big deal. I had no closed door briefings and I have no political connections. I am just a smarter than your average bear critical thinker I guess.