How did Congress trade in 2021?
I analyzed 6,000+ trades made by Representatives in Congress to find out if they beat the market.
And... whether you can make alpha following any of them.
Here's what I found:
I analyzed 6,000+ trades made by Representatives in Congress to find out if they beat the market.
And... whether you can make alpha following any of them.
Here's what I found:
1/ 2/3rd Americans think their politicians are deeply corrupt.
Their ability to trade stocks might have something to do with it.
The stock act of 2012 did little to stop them.
While the bill to ban trading is being pushed, let's take a look at how Congress traded last year...
Their ability to trade stocks might have something to do with it.
The stock act of 2012 did little to stop them.
While the bill to ban trading is being pushed, let's take a look at how Congress traded last year...
2/ The data for this analysis is from @capitol2iq
Last week we looked at Senators.
This week, we are looking at Representatives.
Representatives made 6700+ buys and 5400+ sells last year. We're focusing on the buy-side.
Last week we looked at Senators.
This week, we are looking at Representatives.
Representatives made 6700+ buys and 5400+ sells last year. We're focusing on the buy-side.
3/ Results:
96 representatives made $273 MM worth of investments last year!
Senators invested only 12% of their money in stocks.
But representatives had 82% of their investments in stocks and options.
96 representatives made $273 MM worth of investments last year!
Senators invested only 12% of their money in stocks.
But representatives had 82% of their investments in stocks and options.
4/ Representatives on average made an 8% return on average.
This was a little less than senators, much lesser than market returns.
You would have only got a 5% return following their trades, compared to 9.6% through the market.
(The difference is due to the reporting lag)
This was a little less than senators, much lesser than market returns.
You would have only got a 5% return following their trades, compared to 9.6% through the market.
(The difference is due to the reporting lag)
5/ But the average is not the full story!
Nancy Pelosi made a 48% return last year investing $970K in NVIDIA and $695K in Roblox.
(Remember "Free Market economy"?)
In fact, you could have beaten the market following anyone on this list other than August Pfluger!
Nancy Pelosi made a 48% return last year investing $970K in NVIDIA and $695K in Roblox.
(Remember "Free Market economy"?)
In fact, you could have beaten the market following anyone on this list other than August Pfluger!
6/ The industry distribution of investments was requested in the last post.
While Tech got the maximum allocation and 2021 was good for tech and growth stocks,
Max returns were obtained from Finance and Real estate!
While Tech got the maximum allocation and 2021 was good for tech and growth stocks,
Max returns were obtained from Finance and Real estate!
7/ Limitations:
Data Quality - While I have verified a slice of the data taken from
@capitol2iq, I can't guarantee 100% accuracy.
Time Delay - There is a delay in reporting, so not all trades in 2021 are captured.
Data Quality - While I have verified a slice of the data taken from
@capitol2iq, I can't guarantee 100% accuracy.
Time Delay - There is a delay in reporting, so not all trades in 2021 are captured.
8/ Limitations contd:
Other investments - We do not know how the other investments such as private equity, municipal bonds, etc. performed.
Biggest limitation - We don't know how overall portfolio looks.
So it's difficult to identify short-term plays and liquidity events.
Other investments - We do not know how the other investments such as private equity, municipal bonds, etc. performed.
Biggest limitation - We don't know how overall portfolio looks.
So it's difficult to identify short-term plays and liquidity events.
9/ Conclusion:
Congress didn't beat the market in 2021.
BUT if you look at the past 3 years of data, it shows a very different story!
Even setting the start date of the analysis back by a month to Decβ20 would make for a very different result as showcased by @unusual_whales
Congress didn't beat the market in 2021.
BUT if you look at the past 3 years of data, it shows a very different story!
Even setting the start date of the analysis back by a month to Decβ20 would make for a very different result as showcased by @unusual_whales
10/ Itβs high time that we bar elected representatives from trading stocks.
"US Congress can trade stocks or keep the public trust. Not both" - Business Times.
For the full article and data used in the analysis, check out the post:
marketsentiment.substack.com
"US Congress can trade stocks or keep the public trust. Not both" - Business Times.
For the full article and data used in the analysis, check out the post:
marketsentiment.substack.com
11/ If you would like to check out last week's analysis on Senator trading, you can do so here:
12/ Good reads:
Shout-out to two writers I enjoy reading a lot.
@Jack_Raines
writes a Substack on finance, investing, and prioritizing happiness. Every week's article is a pleasant surprise!
@Julian
for insightful threads on learning, writing, and productivity.
Shout-out to two writers I enjoy reading a lot.
@Jack_Raines
writes a Substack on finance, investing, and prioritizing happiness. Every week's article is a pleasant surprise!
@Julian
for insightful threads on learning, writing, and productivity.
13/ Follow @mkt_sentiment for interesting threads 2-3x a week.
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