This should be investigated
This comes out every so often. But, while your average household underperformed the market by 1.4%, your average senator beat the market by 12%. Such a spread would indicate they were privy to inside information.
7 Responses to “This should be investigated”
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October 14th, 2010 at 8:53 am
No. such a figure indicates that the “average household” buys high and sells low, time after time after time.
The dot com fiasco comes to mind. I lost no money in that, and made a little, because I was careful about which companies I invested in. (When people tell you “you can’t lose money in ________” run for the exits. Which is just what they said about dot com stocks before they said the same thing about real estate.)
Given that the “average household” only invests in mutual funds – I own NO mutual funds – it isn’t surprised that they can’t beat the street.
October 14th, 2010 at 9:45 am
>Such a spread would indicate they were privy to inside information.
Well, seeing as they can create “inside information”, even before the company itself knows about it, yea, that’s a bit of an understatement.
It’s also, AFAIK perfectly legal.
I vote for a law making every congressthing’s buys sells, and trades on our capital markets an open secret. Require the brokers that do their trading to publicly post the results on a ticker-like feed. Then we could create a congressthing’s index fund and all profit from the no longer inside info 😉
October 14th, 2010 at 10:52 am
No investigation is needed. They’re exempt from insider trading laws just like they exempt themselves from every other law they pass.
October 14th, 2010 at 3:29 pm
Beware misleading averages. What happens when you correct the figures for households that have a similar level of education as most senators? Though I certainly don’t rule out shenanigans.
October 14th, 2010 at 3:30 pm
even income levels wouldn’t account for a 13% swing is my guess.
October 14th, 2010 at 4:31 pm
Actually, I was just reading a blog the other day addressing the sheer number of congressional aides that trade based on information about laws that are about to be passed, but have not been announced yet. It’s only illegal if businesses do it. When people in congress have tried to make it illegal for them as well, it was supported by 10-20 people at best.
What a shock. Laws are only for the little people.
October 14th, 2010 at 4:33 pm
http://online.wsj.com/article/SB10001424052748703431604575522434188603198.html
“The aides identified by the Journal say they didn’t profit by making trades based on any information gathered in the halls of Congress. Even if they had done so, it would be legal, because insider-trading laws don’t apply to Congress.”