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Trading bot that buys stocks bought by politicians is up 20% since May 2022
- spacecadet 3y agoBetter headline: Algorithm discovers deep corruption in Politics.
- kasey_junk 3y agoAlgorithm discovers stock market has volatility and you can cherry pick returns based on historical dates pretty easily
- spacecadet 3y agoSure XD mines more fun.
- pdq 3y ago@dang, can you change the display for (threads.net) to be like twitter, where it shows the username to the right of the post title? For example, threads.net/@quiverquantitative
- hn1986 3y agothat's a great idea! did you message the mods?
- sp332 3y agoTyping "@dang" does not actually do anything. Write to the mods using the Contact email at the bottom of the page.
- wellthisisgreat 3y agoCompletely unrelated by I just wondered if GP knew that “@“ doesn’t have any functionality but used as a sort of etiquette symbol.
- cgriswald 3y agoIt seems pretty dang useful to me to make it clear when you're referring to the username.
- OJFord 3y agoAs a non-American, I always read that 'dang' as the moderator, and then it takes a second. Relatedly, I was here many years before I realised (via that NYT or WSJ or whatever it was profile) that it's 'Dan G'!
- 22c 3y agoI figure most people on HN know that @dang doesn't do anything and it's shorthand for "dang, if you happen to be reading this, [...]".
- foobarian 3y agoBut... how do we know that @dang doesn't do anything?
- ImAnAmateur 3y agoDang himself says to send in an email. I never wrote down the address though...
- sp332 3y agoAgain, it's the Contact link at the bottom of the page here.
- godelski 3y agoSure it does. It allows dang to search posts for his name without getting results that conflict with the actual word dang. Plus it's pretty common usage in places and your eye is drawn to that allowing you to recognize it's a name and not just a word. Pretty useful where people use handles and not actual names. I mean yeah, HN isn't a "smart" website, but I wouldn't say the @ doesn't do anything
- deleted 3y ago[deleted]
- j33zusjuice 3y agoI thought I saw dang comment once that they wrote a script to find those mentions.
- satvikpendem 3y agoOne year is nothing, let's see how it does over 20 years and 50 years.
- kleene_op 3y agoMaybe there is years of data available on that? If so, someone should do an analysis of how much politicians pocketed since then.
- paulpauper 3y agoit is probably hard to do because the data is hard to obtain or analyze in the correct context
- galangalalgol 3y agoAlso the bill that required the trades to be made public is only 11 years old.
- doitLP 3y agoIs there a legitimate argument for keeping this legal and not pursuing an expansion of existing insider trading laws? The incentives here are horrifically backwards.
- ekianjo 3y agoat the same time let's remove the immunity of politicians and prevent long terms that keep people in office until they die.
- _jal 3y ago> prevent long terms It is a quandary. Some pols burrow in and never go away, to the detriment of the people they're supposed to be serving. On the other hand, term limits just empower lobbyists, who don't have them. You think capture is bad now, just wait until all elected officials are perennial novices at the game.
- ekianjo 3y agoLong term politicians are not adverse either to lobbying. On the contrary they are even more likely to be corrupted like a ripe apple exposed to the sun for too long
- thaumasiotes 3y ago> Is there a legitimate argument for keeping this legal and not pursuing an expansion of existing insider trading laws? What existing insider trading laws?
- frankbreetz 3y agoBecause the people in charge of changing it are getting rich. Why would they change it?
- adamckay 3y agoCan you clarify what you mean by "this"? Being able to copy the trades of politicians or politicians making trades that are almost instantly profitable?
- strangesmells06 3y agoHow does one get this information about congressional trades?
- toomuchtodo 3y agoHouse: https://disclosures-clerk.house.gov/FinancialDisclosure https://disclosures-clerk.house.gov/FinancialDisclosure Senate: https://efdsearch.senate.gov/search/home/ https://efdsearch.senate.gov/search/home/ Background: https://campaignlegal.org/update/how-congress-hides-stock-holdings-plain-sight https://campaignlegal.org/update/how-congress-hides-stock-ho...
- adnmcq999 3y agoDoes the following thing they make you acknowledge mean you can’t use this to pick stocks? “It is unlawful to use the information contained in these Financial Disclosure Statements for (A) any unlawful purpose, (B) any commercial purpose, other than by news and communications media for dissemination to the general public, (C) determining or establishing the credit rating of any individual, or (D) use, directly or indirectly, in the solicitation of money for any political, charitable, or other purpose. See 5 U.S.C. app. § 105(c)(1),(2). In conformity with 2 U.S.C. § 104e(b)(3), certain personally identifiable information in these reports, not required to be disclosed, has been redacted.”
- jcranmer 3y agoIt definitely doesn't fall under (C) and (D). I'd have to stare harder at insider trading laws, but probably doesn't fall under (A) either. (B) might prohibit you from building an index fund based on it, but I think you should be able to do the stock picking yourself.
- y-curious 3y agoThe, literally, million dollar question. Self-reported data success means nothing to me without this
- ckardat123 3y ago
- paulpauper 3y agonot very useful. no comparison of S&P 500 and it stops in early 2023 and starts in 2020. a 3 year backtest that ends in early 2023 and ignores the bull market that began in 2023 is enough to prove anything.
- the_gastropod 3y agoThe post says “The market has been flat during the same time period.”, which is not true.
- ckardat123 3y agoThe market was roughly flat between when the strategy went live (in may of 2022) and when the post was made. The backtest goes back further though, which is what is shown in the graph. Could be improved by having a line on the graph showing when it went live.
- the_gastropod 3y agoAm I missing something? This threads post was made yesterday. Is there a different “end date” mentioned that I’m not seeing?
- phailhaus 3y agoThis is super interesting. The delay between the transaction and the disclosure may not be much of a handicap if lawmakers are making the purchases far in advance of the events to come. Has anyone run a historical backtest of this strategy?
- paulpauper 3y agoIt is hard to run a backtest when the actual strategy cannot be explicated precisely. For example, you would need to know the size of the account/capital. Just saying that a congress person sells $1 million of microsoft is useless unless you know when it was purchased how much capital total etc.
- phailhaus 3y agoThat shouldn't be hard, we have historical stock market data that we can use. The strategy would enter/exit positions on the day that the disclosures were released, see if it beats the market.
- the_gastropod 3y agoThe S&P 500 is up around 16% over the same period, without counting dividends. With dividends, you’d be at around 18%. So… this strategy isn’t particularly impressive unless it can continue this trend over several more years.
- conformist 3y agoThe two graphs have visibly quite different volatilities. A number like 20% is not meaningful unless you also somehow state the risk, eg in terms of volatility or beta or other measures.
- paulpauper 3y ago3 years is not far enough to draw any meaningful conclusion and it abruptly ends in early 2023.
- hhmc 3y ago3 years is plenty if the sharpe is high enough (it probably isn’t, but GP’s comment about volatility of returns is important here)
- johnfn 3y agoHonestly, I'd be shocked if HFT firms hadn't integrated all this knowledge into their algorithms ages ago, removing any potential alpha. More likely I think is just that the market has gone up significantly since May 2022, and good stocks disproportionately do very well in an upmarket. For instance, QQQ, is up 31% in the same time period.
- jsw97 3y agoIf this were true you would expect an announcement effect for disclosures. Testable.
- dmckeon 3y agoRadical proposal: Rather than trying to police leakage of insider information, level the playing field for both politicians and fed employees by creating a dozen or so national mutual funds of at least 1,000 equity positions each that intend to model the US economy as a whole. Anyone can invest in them, but all US Federal employees and immediate family members are required to liquidate all other positions and hold only national funds. If the economy and funds do well, all federal folks profit. Distribute fund management among multiple fund management firms.
- conformist 3y agoUnfortunately the stock market is not (reflective of) the economy? It seems reasonable to force them to diversify nonetheless.
- leoqa 3y agoWhat about state and local gov employees?
- ghayes 3y agoThere are significantly better options here, e.g. by moving assets into a blind trust while in office.
- kumarvvr 3y agoDo blind trusts really work? I mean, with the amount of corruption, would it not be possible to get all info from the trust and give decisions, one way or the other?
- kristopolous 3y agoI'm a big supporter of a forced liquidation, without tax penalties, of all positions upon winning federal election. That would of course dramatically limit the people who pursue public office to you know, only virtuous people who are willing to selflessly sacrifice themselves for the public good. Those people do exist, we've just configured our electoral system in every way to discourage such admirable behavior. It doesn't have to be full of opportunistic palm greasing scoundrels, we've just set it up that way.
- tmpz22 3y agoTaking the poster by their word they do a good job highlighting the delta between a politician's transaction and their disclosure of the transaction which seems to have about a month delay. I personally really really struggle to trust the data represented in these tweets (err threads?) after the barrage of day-trade influencers we've seen in the last few years. Would be interested to see a peer-reviewed version of this experiment...
- fyokdrigd 3y agothis guy posts on tiktok, Instagram, etc... two times a day. just sell a service that buys stocks based on monthbold data about senators disclosure forms but he sells it like he has some special information.
- waveBidder 3y agotweet is no longer a trademark?
- rootsudo 3y agoI’ve looked into this- basically when the congress member purchases or sell stock they have a month or so before they have to report it. It makes live trading impossible. But it is interesting to go back and see who knew what , when.
- code_biologist 3y agoDo they have to report the actual day of the trade? It seems possible to backtest their trades too.
- latency-guy2 3y agoFrom what I remember, no, just that it was executed, and within 45 days of the transaction being completed, or 30 days if notified, and only for trades > $1,000. So you only know that within the last 1.5 months a trade was executed for any particular representative
- dTal 3y agoReally ought to be the other way around - they have to declare purchases a month in advance.
- Rebelgecko 3y agoIt's hard to find a calculator/data source that takes dividends into account, but it looks like if you bought an S&P500 index fund in May 2022 you'd be up around 18% depending on which day you purchased. So not very dramatic IMO
- danuker 3y agoLooks like VFINX returned 8.8% since 2022-05-01. How did you get to 18%? https://totalrealreturns.com/n/VFINX,VBMFX,USDOLLAR?start=2022-05-01 https://totalrealreturns.com/n/VFINX,VBMFX,USDOLLAR?start=20...
- Rebelgecko 3y agoI cherrypicked a day in May 2022 from here that gave something like 14% growth (https://finance.yahoo.com/quote/%5EGSPC?p=%5EGSPC https://finance.yahoo.com/quote/%5EGSPC?p=%5EGSPC), and IIRC the dividends is like 2% annually Edit: tweaking your link to May 11 gets it up to 14.8%, and I'm not sure if it's just using the opening price or the lowest of the day
- dralley 3y agoMay 2022 was peak "we're headed for a recession" dooming
- deleted 3y ago[deleted]
- paxys 3y ago
- dh5 3y agoSeparately, retail investors also outperform the S&P on average: https://www.wsj.com/finance/stocks/who-you-calling-dumb-money-everyday-investors-do-just-fine-9dd63892 https://www.wsj.com/finance/stocks/who-you-calling-dumb-mone... > The average individual-investor stock portfolio has risen about 150% since the beginning of 2014, according to investment research firm Vanda Research, which began tracking the data nine years ago. That beats the S&P 500’s roughly 140% during the same period.
- Joel_Mckay 3y agoThat is almost 3X to 4X times higher returns than most bonded investment managers. Kind of sad really, but it is easy money for that 3% high-risk section of a portfolio =)
- tedunangst 3y agoWait, this guy threw $100 million at the congress bot? Or is this paper trading?
- ckardat123 3y agoThis is my tweet, thanks for sharing! If anyone is interested, I built a dashboard that tracks the performance of individual congressional stock trades here: https://www.quiverquant.com/congresstrading/ https://www.quiverquant.com/congresstrading/ It also allows you to search for trades by stock, instead of needing to parse through thousands of disclosure forms. I do want to mention one weakness of my data, which is that I don't currently parse hand-filed disclosures. Most politicians do electronic filings, which are easy to scrape, but some still file by hand. Working on a solution for that, which should hopefully be live before too long.
- RandomWorker 3y agoPass it into chatgtp see what it comes up with.
- joshspankit 3y agoNow that it’s multimodal you can pass it the photo and it will probably output whatever data you want.
- withinboredom 3y agoHeh, yeah, whatever you want indeed. I wouldn't trust it... https://www.youtube.com/watch?v=A1QzVQn8hH8 https://www.youtube.com/watch?v=A1QzVQn8hH8
- joshspankit 3y agoI mean, never trust any OCR
- fsdadsfdsalkj 3y agoWhere do you get the data?
- ckardat123 3y ago
- Buho7o910 3y ago[flagged]
- olliej 3y agoI still don’t understand why elected officials trading on non public information can’t be considered a intelligence breach
- missedthecue 3y agoMy unpopular opinion is that I think politicians trade on non-public info much less often the the average netizen thinks. There are high profile or notable cases, yes. But I'm talking in general. Pelosi for instance recently traded Roblox in size. What kind of info could she possibly have about that. But Twitter was up in arms about it. The obvious thing to do from a policy perspective is simply require investing in index funds with sales scheduled well in advance. C-suites and bankers have to do it, why let politicians even give the appearance of corruption.
- m3kw9 3y agoThat’s a pretty crappy return vs index
- ourmandave 3y agoYou could have a fund based on representatives called the 435 Index.
- zmmmmm 3y agoJust over a year is not very long to draw conclusions
- Imnimo 3y agoIf this isn't just luck, and it's based public and obvious information, why wouldn't the effect already be priced in by large firms trading on it?
- _lvbh 3y agoDid something similar for Malaysian stock market (bursa) and got ~26% since August. I think this is probably much more effective in corrupt countries. (Our politicians and inside traders don’t disclose stuff obviously but there are signals that indicate an inside trade based on warrant stocks)
- blondie9x 3y agoMarkets up 16% over same time range.
- sackfield 3y agoI wonder how big the difference would be if the politicians close associates had to report their asset portfolios. I'm willing to bet there is a lot of "tips" being spread and favours repayed as a form of laundering.
- Animats 3y agoThis is running on info that's about 30 days behind politicians' trades. If it was running on, say, info that was only 24 hours behind, how would it have done?
- slantaclaus 3y agoThat’s not super impressive stochastically speaking just saying
- deleted 3y ago[deleted]
- reset2023 3y agoSam Altman is right. Ai will break capitalism. Trust is the foundation of human storytelling.