4 ms·
Someone really needs to do a meta-analysis of these results because a paper from a few years ago showed that members of congress underperform at stock picking:
by andrewmutz 10mo ago
Someone really needs to do a meta-analysis of these results because a paper from a few years ago showed that members of congress underperform at stock picking:
https://www.nber.org/system/files/working_papers/w26975/w26975.pdf https://www.nber.org/system/files/working_papers/w26975/w269...
Both papers could be true if congresspeople are worse than the public at picking stocks, but congressional leaders are just better than the average congressperson
- James_K 10mo agoIf this were the case, they would be just as good before becoming leaders. Yet the 47% increase only happens when they gain a position of power.
- harvey9 10mo agoAny chance they worked really hard for that promotion and it paid multiple dividends? Just kidding.
- bumby 10mo agoI didn’t get a chance to read the entire NBER paper, but an important nuance is that it takes an industry-normalized perspective. It could be possible that someone in Congress has insider information about a specific industry that helps them, but not about a specific stock. For example, if I knew about specific legislation that would impact auto manufacturers I may have a better idea to get in or out of that sector without necessarily knowing if Ford will do better than GM. To your point about meta-analysis it would also be useful to know if members are worse than normies at picking industries as well.
- lazyeye 10mo agoIt would also be interesting to compare overall stock-picking "ability“ across party lines. Real-estate investing is another corruption vector. One way to bribe a politician is to sell them a house at a million dollar discount. The optics become that the politician is a “savvy real-estate investor".