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Pelosi and a lifetime of trading

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Re: Pelosi and a lifetime of trading

#161

Post by t0mbstone »

woah wrote: post #92
takeda wrote: post #2

Instead of fixating that Pelosi made more than others I think right question is, why someone who actually can impact stock options and also has information not available to the public is allowed to trade?

Anyone with enough power and influence can impact stock options, and everyone has some information not available to the public. For example, Kanye West could buy calls on Uggs, then go out to lunch wearing some Uggs, then sell the calls after it hits the tabloids. Laws applying only to politicians would not stop anyone else from influencing stocks, and would only restrict the types of people choosing to become politi…

A single celebrity attempting to manipulate the stocks they own via public perception is a fundamentally different thing than a bunch of politicians using their legal power to manipulate the stocks they own for their own personal gain.

Re: Pelosi and a lifetime of trading

#162

Post by btilly »

legitster wrote: post #43

Nancy Pelosi's husband is CEO of a investment firm. It shouldn't be that surprising that she tops the list for investments. As others online have pointed out, despite an above average year, her portfolio is still underperforming an S&P 500 index fund with the dividends reinvested. Should politicians be forced to put their assets in a blind trust while in office? Yeah, probably. But I don't think I will indict Pelosi'…

That she invests a lot, nothing weird there.

That her investments do so well? That's another story.

Re: Pelosi and a lifetime of trading

#163

Post by jb775 »

boulos wrote: post #41

The article never says this, but her husband, Paul, is a longtime investor / VC [1]. There’s obviously still a huge opportunity for leakage of information that Nancy Pelosi receives, but the trades don’t actually look suspicious nor requiring non-public information. There was some reporting on this issue more broadly when Senator Burr seemed to place trades directly due to coronavirus information, which included Pelo…

> her husband, Paul, is a longtime investor/VC...but the trades don’t actually look suspicious

I would argue this is an even bigger red flag. Professional traders are much more aware of subtle cause & effects within the markets.

i.e. Not-yet public info about reducing tariffs on imported wheat would lower raw-material cost for bread companies, then would lower the cost for McDonald's hamburger buns, then McDonalds makes more profit this quarter...and Pelosi's husband buys a bunch of options on McDonalds, then dumps the options immediately after the info goes public.

So insider information that seems innocuous to the average person could be used and abused like crazy by professionals like Pelosi's husband.

Re: Pelosi and a lifetime of trading

#164

Post by jb775 »

Elected & appointed govt workers and their immediate families shouldn't be permitted to buy/sell any stock while in office or 5 years following.

And they shouldn't be allowed to take jobs/money (including "speaking fees", a.k.a. bribes) from publicly owned corporations for 15 years after leaving public office.

Re: Pelosi and a lifetime of trading

#165

Post by throwawayboise »

c7DJTLrn wrote: post #155

Why are all of the members of Congress extremely wealthy? Doesn't seem particularly representative of the general population. Members of the UK Parliament are generally upper-class, but they're not all extremely wealthy.

They aren't all extremely wealthy. The powerful committee leaders, majority and minority leaders, etc. generally are because they are the ones who choose which issues will make it to general debate and vote, so they are the ones who have the ability to influence markets.

Some random young representative from the middle of nowhere has almost no influence in congress. It takes years and powerful backers to develop that. Part of the argument for term limits is to prevent people from making a career out of being a representative or senator, which is what you need to do accumulate power.

Re: Pelosi and a lifetime of trading

#166

Post by abeppu »

boulos wrote: post #41

The article never says this, but her husband, Paul, is a longtime investor / VC [1]. There’s obviously still a huge opportunity for leakage of information that Nancy Pelosi receives, but the trades don’t actually look suspicious nor requiring non-public information. There was some reporting on this issue more broadly when Senator Burr seemed to place trades directly due to coronavirus information, which included Pelo…

> Index funds okay, specific stocks or perceived competition, no.

I think for people in high office, even controlling when to move in or out of index funds is also inappropriate. Congress has both information and makes choices which have broad impact across the economy.

But to your first point, that this "doesn't actually look suspicious", I'll only mention that classic "indicators of suspicion" in a criminal context are motive, means and opportunity, all of which seem to be present.

But to broaden the conversation, the main implied concern is did she profit through use of non-public information. While I think that's a worthy concern, I think perhaps the more important one is whether the holdings of congress overall tilt the policies they enact. This extends beyond stocks (where even members who are limited to index funds may be disinclined to, e.g. push for limits or rules surrounding buybacks etc), to areas like how real estate holdings impact housing policy stances.

Re: Pelosi and a lifetime of trading

#167

Post by throwawayboise »

stonemetal12 wrote: post #147
throwawayboise wrote: post #66

Earlier quoted context omitted.

I think they should be able to own an investment portfolio, but while they are in office (and perhaps after, if they engage in lobbying) it should be in a blind trust.

How do blind trusts operate? Surely you don't put in 4K of APPL shares and a couple of years later get back carrot futures or some thing.

I don't know details but in general the portfolio would be managed by a trustee, probably with a certain goal specified in advance (preservation of capital, growth, blended, etc.) the key is that the owner of the assets has no control over or knowledge of the specific investments once the trust is formed.

I don't know if a rollover into a blind trust has to involve a complete liquidation to cash to start off. That would make sense, since then there could be no assumptions about which securities the trust held.

Re: Pelosi and a lifetime of trading

#168

Post by abeppu »

Far beyond limiting what members of congress or other high office holders can invest in while in office, I think the ideal should be that public office holders must play a Rawlsian gamble: when they leave office, we select a random citizen, and their level of wealth is wiped to match that citizen. Excess goes to a fund for public campaign financing.

Not only should politicians not be incentivized to select policies which benefit them specifically, but they should be incentivized to select policies which materially benefit the population overall.

Re: Pelosi and a lifetime of trading

#169

Post by lefrenchy »

minsc__and__boo wrote: post #104
lefrenchy wrote: post #91

Earlier quoted context omitted.

Regardless of returns, buying TSLA leap options is a terrible look and breaks down trust in institutions. How am I supposed to look at that and just trust that she isn’t influencing policy with her options trades in mind? It’s not even about evidence of illegal actions, she’s a public official and part of her job is to build trust with the public.

>buying TSLA leap options is a terrible look and breaks down trust in institutions What is unusual about her spouse buying TSLA options? I'd say that the TSLA CEO has been more influential over the TSLA price than any new legislation.

She is one of the most powerful legislators in the country. If she lobbying and pushed for EV credits for instance, it could greatly affect the price of the stock. If she were to put up roadblocks to block inquiries into Tesla safety concerns or issues of the sort, it could prevent massive price changes in the stock.

Just because Elon Musk has more power over the stock does not exonerate her from buying potentially massively lucrative options on a stock that she has power to affect. My understanding is she is not under the same restrictions as a CEO would be when trading that ticker, and she also has entirely different incentives than CEO's do. CEO's have the incentive to make the company perform well because their compensation is tied to the share price. Nancy Pelosi in this case has the incentive to rule favorably for Tesla because her options will benefit from it. Those incentives are very very different.

Re: Pelosi and a lifetime of trading

#170

Post by somebodythere »

soheil wrote: post #99
swalsh wrote: post #52

Is there an ETF where I can invest in the same things politicians are investing in?

No because if there was and it did outperform the market, the returns would quickly evaporate as more and more people rushed in to invest in that ETF.

And yet strategy ETFs still exist
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