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11 months ago
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Investors dedicate countless hours to solving the mystery of how to beat the stock market - and many lose millions of dollars in the process.
But the answer might be simple: Just copy Congress.
A tool which copies trades made by members of Congress and their families has gained nearly 20 percent this year – performing twice as well as the stock market average of eight to ten percent.
And a separate tool which is dedicated to tracking Nancy Pelosi's investments reveals her portfolio has returned a remarkable 50 percent in the last 12 months, vastly outperforming the 17 percent gains of the benchmark S&P500 index of America's top companies.
The tools were created by Quiver Quantitative, which uses public disclosures from members of Congress to mirror their trading activity and track the results.
A tool which copies investments by members of Congress and their families has risen 20 percent in the past 12 months. The green shows the Congress tracker has far outperformed the the S&P500, represented by the gray line, since April 2020
A separate tool focused solely on Nancy Pelosi's portfolio shows that her investments have risen by around 50 percent across the past 12 months. Pelosi's investments are illustrated by the blue line, while the grey line shows the performance of the S&P500 across the same period
Pelosi's portfolio has outperformed the broader stock market by a huge margin and Quiver Quantitative estimates she 'has made almost 100x her congressional salary off of her trading'
The disclosures reveal some politicians have displayed a near-prophetic ability to invest in companies just days before their stock prices explode. Some sit on congressional committees linked to the firm's they've invested in.
James Kardatzke, CEO of Quiver Quantitative, told DailyMail.com: 'You can almost certainly see instances where there seems to be people acting on information that they may have been receiving in committee meetings, or may have been receiving just based on the nature of their job.'
Quiver Quantitative has singled out several trades for their success. None of the members of Congress have been accused of insider trading.
The trades Quiver Quantitative has highlighted include the purchase of up to $115,000 of Lockheed Martin stock by Representative Scott Franklin on September 12, 2022.
Franklin, a member of the House Committee on Appropriations, which regulates government expenditure, bought stock in the defense company weeks before it announced better-than-expected revenues thanks to demand for F-35 fighter jets.
The stock price increased 18 percent on news of the company's financial results, which were published on October 18 2022, resulting in a gain of up to $20,000 on Franklin's initial investment.
Franklin’s spokesman told DailyMail.com he is not personally involved in any stock transactions and has a broker who manages his investments.
They said: 'He has instructed the broker to diversify his portfolio across various sectors of the economy to spread the investment risk.
'His broker has unilateral authority over which stocks to buy or sell and in what amounts.'
The tracker added Tesla stocks in May after Congressman Josh Gottheimer (left) and Senator Tommy Tuberville invested in the carmaker. Within weeks the stock increased by 64 percent
Representative Mark Green bough up to $250,000 worth on NGL Energy stock on March 24. The stock has risen by 70 percent and Quiver Quantitative estimates that Green has 'made more money off of his NGL Energy trading than he has off of his congressional salary this year'
On May 15, the tool added Tesla stocks to its portfolio after purchases by politicians including Senator Tommy Tuberville and Representative Josh Gottheimer.
The share price then increased by 64 percent in just 36 days. The tracker offloaded its Tesla stock following the sale of shares by Gottheimer and Tuberville, Quiver Quantitative said.
In a third example, Representative Mark Green bought up to $250,000 worth of NGL Energy stock on March 24. The stock has risen by 70 percent since.
Filings show Green has made several more purchases of shares in the company since - with trades totaling hundreds of thousands of dollars - and Quiver Quantitative estimates that Green has 'made more money off of his NGL Energy trading than he has off of his congressional salary this year'.
Quiver Quantitative's separate tracker for Nancy Pelosi's trading activity has returned around 50 percent since last December.
Pelosi has profited hugely from massive gains this year in the stock price of Nvidia, the chipmaker whose valuation has passed $1 trillion thanks to the AI boom.
Pelosi also owns millions of dollars worth of Microsoft and Apple stock, which have both risen by around 55 percent since the beginning of the year.
Rep. Gottheimer said in a statement to DailyMail.com: 'Prior to taking office, I turned over management of my retirement savings and investments to a third party, who has full investment discretion. Throughout my time in Congress, decisions related to my managed investments have been made at the direction of that third party.'
A spokesperson for Tuberville said: 'Senator Tuberville has long had financial advisors who actively manage his portfolio without his day-to-day involvement.'
The offices of Pelosi, Green and Franklin did not immediately respond to requests for comment.
Kardatzke said it's hard to say with 100 percent certainty that trades are 'improper or someone is active with inside information'.
Pelosi has profited from massive gains this year in the stock price of Nvidia, the chipmaker whose valuation has passed $1 trillion. She also owns millions of dollars worth of Microsoft and Apple stock, which have both risen by around 55 percent since the beginning of the year
'Tracking what members of Congress are doing can give you insights that you might not be able to find anywhere else in terms of how a company might perform in the future [and] how they might be affected by the government,' he said.
He said the tools were also key to help improve accountability and transparency.
'Our hope is that sometime in the near future, there's better regulation regarding congressional stock trading, and possibly even a ban on members of Congress trading stock.
'I think, obviously, the more people that pay attention to this data and the more people that call out members of Congress when they trade in suspicious or improper ways, I think the sooner that's likely to happen,' he said.
Current rules allow members of Congress to trade stocks freely, but they must report their trading and they are barred from using non-public information to inform their purchases.
But the fine for lawmakers who break the rules is typically just $200.
Earlier this year, Democratic Senator Kirsten Gillibrand and Republican Senator Josh Hawley formally introduced the 'Ban Stock Trading for Government Officials Act', which would prevent members of Congress, the president, vice president and other White House officials - along with their relatives - from trading stocks.
But Kardatzke added that while many pieces of legislation have been introduced to curb the practice, few ever make it to a vote.
He said his firm has been 'surprised how consistent' the gains of stocks chosen by Congress have been.
Gottheimer's statement said he has supported bills to tighten the rules around trading by Congress and added: 'I don't believe Members of Congress, judges, or any government employee in a policy role, should be involved in the day-to-day trading of securities, including crypto currencies.'
English (US)