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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

#141

Post by desdiv »

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?

>Would they forced to sell their stock?

No, the proposed legislation does not affect your existing holdings you had before you become a Member of Congress, as long as you don't touch those holdings during your term of office.

"Members would also have the option of retaining their existing investments while in office, so long as they do not trade them while in office, or transferring their holdings into a blind trust. [0]"

>Does this apply to an S&P 500 ETF, if so, why?

No, since the S&P 500 is not an individual stock. All broad-based investments are exempt.

[0] https://krishnamoorthi.house.gov/media/press-releases/congre...

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

#142

Post by CharlieMunger »

seoaeu wrote: post #137
CharlieMunger wrote: post #92

Earlier quoted context omitted.

Short-term stock price changes are noise. Berkshire's investments are based on a deep understanding of the business and are intended to produce good long-term results. Factors like economic moat, trends in consumption, conservative valuation, etc. For example, Berkshire purchased Apple (AAPL) between 2016 and 2018, at an average price of $35 per share (P/E ratio of 12 or 13), and it was years before that paid off. Th…

Berkshire doesn't have to be right about every stock pick as long as the average is good. But if you buy 100% of the Berkshire picks that go down and less than 100% of the picks that go up (because some never drop below the level they bought them for), there is a real risk that you could do substantially worse

Buffett makes huge new investments very, very rarely. Three in the last 5 years.

Apple: buying began in 2016.

The 5 major Japanese trading houses (the sogo sosha -- Itochu, etc.): buying began in early 2019.

Verizon: buying began in late 2020.

They all trade at or near Berkshire's price, if not far below, and you get one new idea every few years.

There are other new purchases (Chevron, Kroger, AbbVie, Aon, RH, etc.), but these are small, lower-confidence positions that are often sold as soon as the price rises far enough. Probably Weschler and Combs, not Buffett.

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

#143

Post by [deleted] »

jasonwatkinspdx wrote: post #119
qwertyuiop_ wrote: post #114

Earlier quoted context omitted.

He has magical superpowers and just happens to be the husband of a policy maker that drives trillions in government spending.

Roughly 9 out of 10 hedge funds fail to beat the market or simple passive strategies indexed to it. I'm no fan of Pelosi personally, but observing her husbands performance isn't smoking gun evidence, it's just banal. Also, consider that a lot of what hedge funds offer is bespoke risk profiles to high net wealth individuals that are overexposed to particular market sectors.

[deleted]

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

#144

Post by [deleted] »

cronix wrote: post #93
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

* Nancy Pelosi's husband, Paul Not saying she didn't give him info, but she didn't do the actual trades. He's an investment manager. > Paul Pelosi, investment manager and the husband of House Speaker Nancy Pelosi, purchased up to $11 million worth of mega-cap tech stocks in May and June, according to a financial disclosure form filed last week. https://markets.businessinsider.com/news/stocks/nancy-pelosi...

[deleted]

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

#145

Post by TheDudeMan »

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.

The including of the 45-day threshold in that law is tantamount to admission of corruption. Why else would it be there? Because we don't have the technology to automatically disclose their every trade in less time?

(I know we are not talking about automatic disclosure, but if we were, the time scales could be seconds, not weeks.)

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

#146

Post by mieses »

kbenson wrote: post #138
qwertyuiop_ wrote: post #114

Earlier quoted context omitted.

He has magical superpowers and just happens to be the husband of a policy maker that drives trillions in government spending.

Maybe. Or maybe by nature of his relationship he gets approached more for interesting opportunities? Is Dr Dre an amazing talent scout, or was he out and about and by nature of his own fame approached by artists such that he could pick the obvious good opportunitie? Or maybe both apply? Perhaps having money, power or fame is an attractor of opportunities all on its own. It doesn't have to be that, but "better than av…

He would also be approached more often with poor investing opportunities.

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

#147

Post by SubiculumCode »

nradov wrote: post #97
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.

When stocks only go up, every trading strategy appears to work. Let's see what happens during the next sustained bear market.

That is why you have to judge it against an active baseline: for example, a buy and hold strategy.

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

#149

Post by Consultant32452 »

perl4ever wrote: post #130
Consultant32452 wrote: post #126

Earlier quoted context omitted.

Stocks confer ownership. Is she spending government money at a company that she is a partial owner of?

Would that be an issue if it was owned through an S&P 500 fund? I would agree that options look suspicious, even if they are not "short dated out of the money" types. But mega cap stocks are lot harder to manipulate than some tiny obscure company. I think I read that Barack Obama put all his savings into government bonds while he was in office, which is admirable and maybe it would be good to mandate high level peopl…

The returns don't matter. The conflict of interest matters. If you commit insider trading but wind up losing money you are just a sucky criminal.

Blind trust is the only acceptable option. It's been tradition for Presidents through most of my lifetime. Trump didn't do it and it was rightfully a big shit storm.

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

#150

Post by dukeofdoom »

I'm curious how many times she doubled her money over her career.

Some people will turn themselves into a pretzel to deny the possibility of a conspiracy. Its quite amazing to watch.

Its the like the counter opposite of the person that believes every conspiracy theory.

They'll string implausible explanations like a christmas lights. Ignoring that probability is multiplicative not additive.

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