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TikTokers Are Trading Stocks by Copying What Members of Congress Do

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Re: TikTokers Are Trading Stocks by Copying What Members of Congress Do

#81

Post by brundolf »

UnpossibleJim wrote: post #57
brundolf wrote: post #4

I'm not a market expert, but... my gut tells me this would have some kind of corrective effect, wouldn't it? Amplifying the inside information, allowing others to capitalize on it, would even out the unfairness of the privileged position in some roundabout way, wouldn't it? Obviously scaled by the number of people actually doing this, and with how much money Or- would it have the opposite effect? Would it actually gi…

Yes, but it's also a form of "crowd sourced insider trading" around a person who won't be indicted, as they aren't part of the scheme... so far as I can tell. It's a loophole because no law has been written about it, as of yet.

Right, but if it gets enough awareness and has enough direct negative impact on people (particularly people with money and influence), it could become enough of a hot-button issue that lawmakers are pressured to write that law

Re: TikTokers Are Trading Stocks by Copying What Members of Congress Do

#82

Post by paulpauper »

not2b wrote: post #21

This is unlikely to work because of the timing delay. Suppose a member of Congress has access to inside information and trades on it. They have 45 days to disclose the trade. By the time the trade is disclosed, the market has already moved: if Pelosi or McConnell or whoever bought low so they could sell high, a month later the increase is probably already baked in.

Yes this is the catch. You are trading on old data. Maybe someone could backtest to see if it still works.

Re: TikTokers Are Trading Stocks by Copying What Members of Congress Do

#83

Post by int_19h »

uoaei wrote: post #52
0xFreebie wrote: post #49

Earlier quoted context omitted.

It's more complicated than that. If you prohibit stock ownership, they will cheat with every other asset class. (Real estate deals are easy too). If you prohibit all asset classes, it means only poor people can run for office - so they give inside tips instead to their brother, son, or campaign donors while maintaining a laughable illusion of poverty. It's a tougher problem than it appears to be.

How do other countries contend with these issues? America is not the be-all, end-all, and your comment seems to imply that this problem has never been wrestled with except hypothetically.

I don't think there's any country that has truly solved these issues; at best, they mitigated them. Politicians everywhere are quite a bit richer than your average citizen.

Re: TikTokers Are Trading Stocks by Copying What Members of Congress Do

#84

Post by paulpauper »

10x-dev wrote: post #47
Cryptonic wrote: post #3

Everybody made huge stock gains in the last year, it was hard work to fuck up in that market. It's not a hint for inside knowledge if you ask me and not a guarantee for future gains to follow another ones portfolio.

I sold AMZN at 2400 and didn't look at it for a while...

dman that sucks. the #1 rule of amazon stock is to never sell.

Re: TikTokers Are Trading Stocks by Copying What Members of Congress Do

#86

Post by DevKoala »

bko wrote: post #80
not2b wrote: post #21

This is unlikely to work because of the timing delay. Suppose a member of Congress has access to inside information and trades on it. They have 45 days to disclose the trade. By the time the trade is disclosed, the market has already moved: if Pelosi or McConnell or whoever bought low so they could sell high, a month later the increase is probably already baked in.

This is also unlikely to work because Congress members don't do particularly well on trading. It's very hard to trade successfully, even with insider information its not entirely obvious what a stock price will do. It seems obvious because news media often reports ad-hoc analysis on a stock price movement. For instance, they'll say "Apple up 5% based on surprising App store revenue growth", but if it were to drop you…

Ehh, Nancy Pelosi beats most hedge fund managers consistently year over year.

https://unusualwhales.com/i_am_the_senate/pelosi

Re: TikTokers Are Trading Stocks by Copying What Members of Congress Do

#87

Post by noxer »

nathancahill wrote: post #15
cortesoft wrote: post #8

Earlier quoted context omitted.

It would have the opposite effect. If everyone buys stock after you do, you make money because the stock price goes up. I would love it if everyone followed my stock purchases after the fact.

Yeah, it's even big market. "Successful" traders start paid newletters with stock alerts so people can follow their trades.

Thats just a "legal scam" and you know because if they would actually be successful trading they would not bother selling newsletters.

Re: TikTokers Are Trading Stocks by Copying What Members of Congress Do

#88

Post by mritchie712 »

CharlieMunger wrote: post #60
mrjivraj wrote: post #43

https://www.cnbc.com/id/218.html This reminds me of a study which showed that even if you bought the same stocks a month after Buffett and his holding company Berkshire Hathaway disclosed their own purchases, you'd still be way ahead of the game. "The market ... appears to under-react to the news of a Berkshire stock investment since a hypothetical portfolio that mimics Berkshire's investments created the month after…

There's a community on Reddit that studies Berkshire's purchases (investments made by Buffett/Weschler/Combs) and tries to follow, purchasing only below what Berkshire paid: https://old.reddit.com/r/brkb/ For example, in 2020 and early 2021 Berkshire paid $59 for Verizon, buying $9 billion worth (a huge Buffett/Weschler telecom investment). Verizon now trades at about $54, so this community is buying.

Wouldn’t this bias towards the “losers”?

Re: TikTokers Are Trading Stocks by Copying What Members of Congress Do

#89

Post by ezconnect »

bko wrote: post #80
not2b wrote: post #21

This is unlikely to work because of the timing delay. Suppose a member of Congress has access to inside information and trades on it. They have 45 days to disclose the trade. By the time the trade is disclosed, the market has already moved: if Pelosi or McConnell or whoever bought low so they could sell high, a month later the increase is probably already baked in.

This is also unlikely to work because Congress members don't do particularly well on trading. It's very hard to trade successfully, even with insider information its not entirely obvious what a stock price will do. It seems obvious because news media often reports ad-hoc analysis on a stock price movement. For instance, they'll say "Apple up 5% based on surprising App store revenue growth", but if it were to drop you…

Congress is buying options not actual stocks. They bet on where it might go and they know where it might go if they have inside information. The only time they will get a big loss is if they are too greedy.

Re: TikTokers Are Trading Stocks by Copying What Members of Congress Do

#90

Post by ummwhat »

brundolf wrote: post #81
UnpossibleJim wrote: post #57

Earlier quoted context omitted.

Yes, but it's also a form of "crowd sourced insider trading" around a person who won't be indicted, as they aren't part of the scheme... so far as I can tell. It's a loophole because no law has been written about it, as of yet.

Right, but if it gets enough awareness and has enough direct negative impact on people (particularly people with money and influence), it could become enough of a hot-button issue that lawmakers are pressured to write that law

Lawmakers are not going to write a law whose sole purpose is indicting lawmakers.
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