In stock market, US senators beat averages

[TeeYiYi]

In stock market, US senators beat averages

By Gail Russell Chaddock | Staff writer of The Christian Science Monitor | from the March 09, 2004 edition

WASHINGTON – A report showing outsize portfolio gains for US senators is raising new questions about ethics and conflicts of interest for Capitol Hill power brokers.

The study found that during the boom years of 1993-98, a majority of US Senators were trading stocks - and beating the market by 12 percentage points a year on average. By comparison, corporate insiders beat the market by 5 percent, and typical households underperformed by 1.4 percent.

Financial experts interviewed for this story say the senators' collective achievement is a statistical stunner, too big to be a mere coincidence.

More: http://www.csmonitor.com/2004/0309/p01s03-uspo.html

TYY

[teryang]

1. What about ethics regs?

Aren't federal officials prohibited from owning properties over which they have decision making authority?

For example, how could Senators own or trade drug stocks before legislating on medicare or medicaid affecting pharmaceutical revenues? Do they trade HMOs while such legislation is pending? Maybe they get their tips from the lobbyists.

Aren't they supposed to put their equities in so called "blind trusts" with no authority over buy sell decisions?

[TeeYiYi]

4. I agree . . .

. . . about ethics regulations. 12 percentage points a year? . . . that's NOT small potatoes.

I think this thing might grow some legs since it's coming on the heels of the Martha Stewart conviction. Even though her conviction was about lying and not insider trading, I think that the insider trading meme is definitely a hot button issue right now. Especially with Martha going to jail while Kenny Boy is still on the loose.

TYY

[KissMyAsscroft]

2. Straight from the pages of Duh Magazine....

What;s next? Kittens are cute? Pizza is delicious?

And these assholes get a huge tax break, dividend tax elimination...

[Wickerman]

3. They are just smarter than the rest of us

nothing to see here.


Move along.


Now.

[indepat]

10. Luckily all would recuse themselves from any/all votes that might raise a

a conflict-of-interest issue in view of the holdings in their own portfolio.

[Mel]

5. privatizing SS

and they have a say in the privatizing of our Social Security so we can invest in the stock market? I say no thanks. Their numbers are too rosy for them to make a fair and honest decision on that issue.

No, it's not a co'winki'dink, they Do have inside information.

[KoKo]

6. Amazing what a little "insider info from the Govt." can do to a portfolio.

Some clever Finacial advice or were they the "market makers?" Since even company insiders didn't do as well as he Senators it sure seems to have a "whiff" of something.

[T Bone]

12. J Edgar Hoover always won tons of money betting the ponies at

the horse tracks.

He really knew his thoroughbreds. Really he did.

[wildmanj]

7. better

its called insider information---lock em up!

[On the Road]

8. Remember, That's 12 Percentage Points, Not 12%

Here it is expressed as a percentage of annual returns of the S&P 500. It's even more striking:

• 1998 24% +50%
  
• 1997 19% +63%
  
• 1996 20% +60%
  
• 1995 14% +86%
  
• 1994 24% +50%
  
• 1993 33% +36%

"The behavior of common stocks purchased and sold by senators indicates that senators trade with a substantial informational advantage," says Mr. Ziobrowski, a professor of finance at George State University.

The article gives a list of the most active traders ("Claiborne Pell (D) of Rhode Island, John Warner (R) of Virginia, John Danforth (R) of Missouri, and Barbara Boxer (D) of California"), but not not those who profited most. THAT would be interesting.

[TeeYiYi]

9. Thanks ribofunk . . .

Thanks for spelling it out. It's worse that I thought. I hope the senators involved are required to explain themselves.

I think this story will catch on.

TYY

[BeHereNow]

11. The information IS available-

I invest and do rather well at it.
Better than most actually.
If you follow certain information, much of it
straight from these very people and do your research
you can buy the same stocks as they do!
How do they know which ones to buy?
Because many of the stocks are obvious choices if
you follow the money.
For instance:
A company called Entrust was rewarded a Homeland
Security contract. It is not a secret and any Senator
would know about that contract. If you listen to the speeches
people like Tom Ridge make, he said they had formed a
partnership with such a company. Granted, he did not say
which company, but I found out ten minutes after he said it
by seaching for HS headlines in the tech news.
Went to the reports on it and found out Wes Clark was
holding a large amount of it and figured, if it's good
enough for the insiders, it's good enough for me.
Follow the money and you'll find the names of power
in the shareholder listings.
BHN

On edit: Forgot to add...It is equally important
to watch when the power sells!
Hint for one to check out:
On C-SPAN they were gabbing about increased
bio-sheilding, more vaccines for this and that.
I sure as heck plan to find out who is going to
get that contract...it will most likely be a "new"
company no one has ever heard of that is
actually formed out of one you have heard of.
It will appear as a blip with two dollar shares
that no one would notice. The big boys will
buy up mass quantities of the two dollar shares
and sell them when they hit the sixty dollar range.

[TeeYiYi]

13. Wow. Thanks for the investment lesson . . .

I plan to get more involved in stock investing one of these days. I'll keep your suggestions in mind when I do. I see stuff all the time on the internet that makes me think, "I wonder what effect 'that' is having on their stock?". Whatever 'that' is or 'whomever' they are, I'm going to start paying more attention and trying some of my own short term stock investments. I've had more than one hunch where I didn't have any money and my hunch panned out. Thanks again BHN. :hi:

TYY

BTW--->> I don't know if I'm entirely convinced that someone here didn't have an inside tip. :shrug:

[SOS]

14. "Households underperformed" is Wall St. jargon

for "ripped off by insiders".

[Moderator]

15. First posted

Way back on Feb 25.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=385088