The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: rothwem on December 03, 2020, 08:33:16 AM
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I'm sorry, this thread might get a bit political. Mods, move this if you think its inappropriate.
I think a lot of people know about the various senators that received early classified briefings about the Coronavirus and then proceeded to make stock trades based on the information, dumping casino stock and buying up tech stocks. Dave Perdue and Thom Tillis are a few of the more notable ones in the news, though they definitely weren't the only ones. Insider trading is notoriously difficult to prosecute and I'm irked by that, but today I found a website that tracks what senators are buying! I haven't fully explored it yet, but its a funny reaction to a fairly huge corruption issue that doesn't have a clear solution.
https://senatestockwatcher.com/
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Lol that is such a bad idea. There is no reason to believe that senators have any better information on stock picking than active managers, even if they have inside information. Knowing something is one thing. Acting on it in the best way is another. And , in many cases, these senators trade best on the advice of active managers anyway.
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I believe Senators have some special immunity, with their own ethics committee dealing with this type of thing. If you were to do the same thing (assuming you're not a Senator! :), trading on inside information could be illegal. As long as it's public information about the Senators investments, it's fine... but isn't that information delayed, making it less useful?
Years ago I saw research that companies which spent more on lobbying had better stock market performance. And I believe Senators manage to gain a lot of wealth during their time in office... so I could believe, all together, that an investment thesis lurks in figuring out what Congress will do next, and with whom. But getting that information when it's very fresh would be quite difficult.
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Lol that is such a bad idea. There is no reason to believe that senators have any better information on stock picking than active managers, even if they have inside information. Knowing something is one thing. Acting on it in the best way is another. And , in many cases, these senators trade best on the advice of active managers anyway.
WSJ - U.S. Senators' Stock Picks Outperform the Pros' (https://www.wsj.com/articles/SB109874916042455390)
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The evidene supporting active managers can't outperform is robust, spawns several decades, and is verified by many independant researchers, including some with nobel prizes. I'd have to see something similiar supporting people in government before I'd believe it. There are many situations of individual active managers, individual trading strategies, and even individual stocks beating the market and having incredible performance. But something that has happened one time in the past isn't a very good indicator about what will happen in the future long term.
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The evidene supporting active managers can't outperform is robust, spawns several decades, and is verified by many independant researchers, including some with nobel prizes.
Can you cite any of it here? Because the only evidence I know of says all that after you subtract out their salaries in fees. Clearly, if you were personally trading like senators you wouldn't need to be paying any fees to them.
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I'd like to take this opportunity to make the friendly reminder that we were all informed as to what was going on in China in January and many of us didn't take it seriously. In fact many of us kind of made fun/light of the situation. Same info congresspeople had, some chose to take it seriously and make moves in the market other's didn't.
https://forum.mrmoneymustache.com/investor-alley/coronavirus-what-are-you-doing-with-your-investments-401ks/msg2546897/#msg2546897
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I'd like to take this opportunity to make the friendly reminder that we were all informed as to what was going on in China in January and many of us didn't take it seriously. In fact many of us kind of made fun/light of the situation. Same info congresspeople had, some chose to take it seriously and make moves in the market other's didn't.
https://forum.mrmoneymustache.com/investor-alley/coronavirus-what-are-you-doing-with-your-investments-401ks/msg2546897/#msg2546897
Wow. Re-reading that thread was an eye-opener. I SPREAD MISINFORMATION about masks based on my poor understanding of the facts at the time. Then I spent March through now shaking my head about people sharing misinformation on social media. And it was so easy to do so at the time. This is a serious lesson about social media and certainty.