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Congress beat the trading market for 2021

Congress beat the market, on average, with its millions of dollars in trade in 2021, according to watchdog organization Unusual Whales.

Members of Congress bought and sold nearly $ 290 million in stocks, $ 140 million in options contracts, $ 124 million in other securities like private equity funds, and $ 500,000 in crypto. currencies in 2021.

In addition, House representatives held inventory for an average of 134 days compared to 128 days for Senators.

Beating the market was a bipartisan effort, with Republicans and Democrats in the House and Senate having higher returns than the SPDR S&P 500 ETF ($ SPY), which “seeks to deliver investment results that before spending , generally correspond to the price and return of the S&P 500 Index.

Unusual Whales found $ SPY returns to be + 13.6 percent for the year. However, House Democrats and Republicans got average returns of + 14.7%. Additionally, Senate Democrats rose + 15.4% and Senate Republicans rose just under + 13%. Therefore, Unusual Whales concluded that, on average, Congress was beating the market.

A collection of 35 members of Congress had individual portfolios that beat $ SPY last year. Of these, 16 were Republicans and 19 Democrats. These include prominent politicians such as Representatives Dan Crenshaw (R-TX), Nancy Pelosi (D-CA), Ron Wyden (D-OR) and Sens. Mitch McConnell (R-KY) and Tommy Tuberville (R-AL).

Some of the biggest deals come from the family of Representative Suzan DelBene (D-WA) who sold up to $ 25 million in Microsoft shares in September and October. In November. Senator Bill Hagerty (R-TN) sold the shares of tech company Datadog for $ 5 million.

The busiest congressional traders were House Representatives Josh Gottheimer (D-NJ), Marie Newman (D-IL), Susie Lee (D-NV) and Zoe Lofgren (D-CA). Senators John Boozman (R-AR) and Tuberville were the Senate’s busiest traders, according to Unusual Whales.

The organization also drew attention to several “unusual trades” that took place throughout the year. Notably, Representative Brian Mast (R-FL) bought shares in Tilray, a marijuana company, before voting for a bill related to marijuana. Mast subsequently sold Tilray at its all-time high for returns of + 563%.

Several members made unusual trades in the shares of Lockheed Martin ($ LMT). For example, Representative Kevin Hern (R-OK), a member of the House Budget Committee, bought a second round of shares of up to $ 100,000 LMT two weeks before the news broke that Lockheed had won a $ 10.9 billion contract with the federal government. .

Representative Kathy Manning (D-NC), a member of the House Foreign Affairs Committee, also bought up to $ 30,000 of Lockheed shares two weeks before the multibillion-dollar contract.

Nancy Pelosi, a lawyer at the Stock Exchange Congress, added to the list of unusual trades. As Inusual Whales explains:

The U.S. military first announced a $ 22 billion augmented reality deal with Microsoft on March 31, 2021, and reiterated its commitment to the partnership in October. President Nancy Pelosi revealed that she exercised 150 calls on March 19, 2021 at an exercise price of $ 130. It is up 160%.

Senator Cynthia Lummis (R-WV) bought up to $ 100,000 in bitcoin, and Senator Pat Toomey (R-PA) held cryptocurrencies while the Senate drafted cryptocurrency tax regulations.

Senator. Tuberville’s late financial disclosures revealed he sold up to $ 15,000 of Microsoft stock two weeks before the US Department of Defense (DOD) canceled a $ 10 billion contract with the company. Rep. Pat Fallon (R-TX), who “sits on the House subcommittee to review DOD software contracts,” also sold Microsoft up to $ 250,000 just before the contract was canceled.

Representative Blake Moore (R-UT), who had the house’s best options trades with an average return of 62.5%, bought up to $ 60,000 of Raytheon shares while on the committee of the armed services of the Chamber in charge of examining the technological contracts of the DOD.

The exchanges could add to the pressure to tighten the rules regarding exchanges by members of the House and senators. The STOCK law was passed by Congress with huge bipartisan support and was enacted in March 2012. This came after Peter Schweizer, senior contributor to Breitbart News, published Throw Them All Out in 2011, denouncing corruption in highest echelons of elected life.

Prior to that, academics had repeatedly shown that the exceptionally excellent performance of congressional stock portfolios indicated that lawmakers were using non-public information when buying and selling stocks.

A 2011 study showed that Democratic lawmakers had much higher “abnormal returns” than their Republican counterparts, indicating a more widespread use of non-public information by Democrats.

The STOCK Act, however, did not prohibit lawmakers from buying or selling individual securities. It only required disclosure of transactions over $ 1,000.


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