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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

#101

Post by [deleted] »

DevKoala wrote: post #86
bko wrote: post #80

Earlier quoted context omitted.

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

[deleted]

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

#102

Post by throw0101a »

sulam wrote: post #19

Honestly people need to step back and ask if they're out-performing the market, and if so what risks they're taking to do so. Most portfolios are up over a 52 week period right now. I keep track of three numbers: what my risk-adjusted portfolio is doing, what my "fun money" portfolio is doing, and what the S&P 500 is doing. The numbers, correcting for holding periods, are 10.96%, 16.28%, 15.78%. IOW the place I keep…

> Honestly people need to step back and ask if they're out-performing the market, and if so what risks they're taking to do so.

There is a further problem about this even if you are out-performing (for now): the feedback loop delay on if you are (or not) can be a long-time, especially if this is for long-term projects (e.g., retirement).

Nick Maggiulli:

> But, what about stock picking? How long would it take to determine if someone is a good stock picker?

> An hour? A week? A year?

> Try multiple years, and even then you still may not know for sure. The issue is that causality is harder to determine with stock picking than with other domains. When you shoot a basketball or write a computer program, the result comes immediately after the action. The ball goes in the hoop or it doesn’t. The program runs correctly or it doesn’t. But, with stock picking, you make a decision now and have to wait for it to pay off. The feedback loop can take years.

> And the payoff you do eventually get has to be compared to the payoff of buying an index fund like the S&P 500. So, even if you make money on absolute terms, you can still lose money on relative terms.

* https://ofdollarsanddata.com/why-you-shouldnt-pick-individua...

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

#103

Post by avs733 »

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…

It could also very possibly be that your distribution isn’t one population but two.

Embed a small over performing population within a larger normally performing /underperforming population.

You don’t j ow who’s cheating, you don’t know when they are cheating, and if they were cheating I can’t imagine they would do it in their public funds.

A simplistic analysis of self-reported data is not strong evfidence to me in this case.

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

#104

Post by OJFord »

kregasaurusrex wrote: post #94

Front-running is nothing new, this is simply a game of follow-the-leader where copying a group's investment strategy is done until larger players learn to frontrun or adversarially trade against the aforementioned frontrunners entering in. For example, a scanner may pick up an SEC filing published at 4:01 PM saying that the CEO, CFO, and CIO all purchased shares in their company, and traders would buy shares aftermar…

If you want to label it, it's more 'pump and dump' than front-running isn't it? I understand the latter to be broker (or whoever) trading with knowledge of, ahead of in time, in front of, other orders? I.e. exactly the opposite of 'follow-the-leader'

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

#105

Post by hanniabu »

lostcolony wrote: post #96
DevKoala wrote: post #86

Earlier quoted context omitted.

Ehh, Nancy Pelosi beats most hedge fund managers consistently year over year. https://unusualwhales.com/i_am_the_senate/pelosi

Yeah, but take the random trades of 435 people and a normal distribution is still going to have a top (and bottom!) outlier. It's certainly reasonable to assume an investment manager (her husband, who is making most of the trades) might be part of the reason to be such an outlier. And even discounting that and looking for shenanigans, well..."she timed buying NFLX almost perfectly" with a purchase a month before it w…

> why the heck would she have known that? That isn't related to legislation

Who knows, maybe insider info they can trade on is a form of bribery and getting a congressman's ear.

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

#107

Post by OJFord »

EduardoBautista wrote: post #98
wolverine876 wrote: post #37

Earlier quoted context omitted.

FTA, you will be happy to know (and I agree): > Congressman Raja Krishnamoorthi, a Democrat from Illinois, is part of a bipartisan group of House and Senate members who have introduced legislation banning lawmakers from owning individual stocks.

I don't understand how this would work. Owning stock is not some kind of investment only the elite have access to. What about people who worked at a company that gave them a few thousand dollars in equity compensation? Would they forced to sell their stock? Does this apply to an S&P 500 ETF, if so, why?

Presumably 'individual stock' is an inaccurate description, and the point is exactly not to apply to ('normal'/basket) ETFs. (But it's not trivial to define, since presumably you would want to ban 'Acme 3x Levered TSLA ETF' or short fund or whatever.)

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

#108

Post by humaniania »

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.

And that's why you want to own a brokerage that members of Congress use for trading. Could probably recruit them with paid speaking gigs or jobs after they are no longer in office, or something like that. Maybe campaign contributions even. Maybe politicians shouldn't be able to own or trade stocks? Maybe they shouldn't be allowed to work in the private sector for a period of time after their service? They get a pension right?

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

#109

Post by dehrmann »

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…

Drug approvals, legal settlements, and getting acquired usually send a stock higher. Buying a company usually sends it lowers.

With earnings, even if you know it in advance, you're trading against what the street thinks, not even what analysts estimate, and the wrong few off-the-cuff words in the earnings call can derail your trade completely.

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

#110

Post by [deleted] »

User23 wrote: post #67
mLuby wrote: post #61

Earlier quoted context omitted.

While we're dreaming… serving officials (and anyone they can't be compelled to testify against) should have to, before taking office: 1. Disclose their income and assets, and keep doing so each year while in office 2a. Put all their liquid assets* into a blind trust, or better yet 2b. Put all their liquid assets* into an index that tracks our economy (not just The Market) * Minus reasonable living expenses—we wouldn'…

It really doesn't matter. They're puppets anyhow and this, along with the sweetheart sinecures at banks, drug companies, etc, are just compensation for being figureheads. Think about it, people that are signing off on trillion dollar checks are only getting million dollar kickbacks. They're not in charge. It's literally an order 1/10^6 cut.

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