Does Congress know something we don’t?? It looks like it. 🕵️♂️
Before COVID-19 fears struck the stock market, several congressmen used material insider information to sell stocks and avoid significant losses. It might surprise you to know that none of them got in any real trouble. 🤔 Ramifications only came for two Georgia congressmen who lost their seats. That has more to do with Georgia’s wild runoff election than insider trading, though.
The COVID congress-versy is just the tip of the iceberg. Just a few weeks ago, Nancy Pelosi’s husband sold out of Big Tech stocks right before Congress began investigations and three congressmen were accused of breaking reporting procedures.
Is this messed up?? Yeah. But some investors see an opportunity to make Congress’s gains their gains, too. The STOCK Act, passed in 2012 under the Obama administration, requires Congressmen (and their relatives) to file disclosures when buying or selling a stock. With this information, investors began to follow Congress’s trading strategies using websites like Capitol Trades or Quiver Quant.
What are the takeaways? Well, Congress is kinda rich. But in all sincerity, congressmen buy the dips. Some of the most popular stocks they bought this month included Google, Microsoft, JPMorgan, and Antero.
And yes, many sold the market high right before COVID messed things up… then they bought back at the lows. Typical. 🙄