Senators beat the market by 12% average

[MonkeyK]

Senators beat the market by an average of 12%

My new rule proposal: Trade disclosures for senators and others of similar influence must be publicly available for review one business day in advance. Records of trades would be kept indefinitely.

If a senator consistently beats the market, I'd like to invest just like they do!

 

[MonkeyK]

from the article:

"I don't get a lot of senators tapping me on the shoulder and saying 'What's hot?' " says Sen. Jon Corzine (D) of New Jersey, former chairman of Goldman Sachs. "If they were so interested in personal economics, you would think I would. I don't find this group of senators even a tenth as interested in personal economics as in other walks of life I've been in."

This disturbs me even more. How do they make so much if they are not interested in personal economics?

 

[techs]

I really love this line from the article:

By comparison, corporate insiders beat the market by 5 percent, and typical households underperformed by 1.4 percent.

The average shlub is losing. Any wonder why the push is on to get the averge person to invest in the market? Its like inviting a poker newbie to the weekly game.

 

[RichardE]

Originally posted by: techs
I really ove this line from the article:

By comparison, corporate insiders beat the market by 5 percent, and typical households underperformed by 1.4 percent.

The average shlub is losing. Any wonder why the push is on to get the averge person to invest in the market? Its like inviting a poker newbie to the weekly game.

Really there fault, if they want to play in the investor game, do your research.

 

[Moonbeam]

Originally posted by: RichardE

Originally posted by: techs
I really ove this line from the article:

By comparison, corporate insiders beat the market by 5 percent, and typical households underperformed by 1.4 percent.

The average shlub is losing. Any wonder why the push is on to get the averge person to invest in the market? Its like inviting a poker newbie to the weekly game.

Really there fault, if they want to play in the investor game, do your research.

So only 1.4% of the public is doing reaseach or are invested with those who are?

 

[themusgrat]

Well, the more educated and higher up, the better the understanding of the market, and better investments. Sure, there is some fraud, but not as much as some people think.

 

[Moonbeam]

I would say that this is how they are concealing bribes. Invest here and you will get that contribution we can't actually hand to you.

He who controls the numbers that stocks are listed at controls the financial universe.

 

[MonkeyK]

Originally posted by: themusgrat
Well, the more educated and higher up, the better the understanding of the market, and better investments. Sure, there is some fraud, but not as much as some people think.

Senators beat the market by 12%. By comparison, corporate insiders beat the market by 5 percent.

Remember we are talking about the market, that thing that very few very educated fund investors beat.

 

[tw1164]

Originally posted by: RichardE

Originally posted by: techs
I really ove this line from the article:

By comparison, corporate insiders beat the market by 5 percent, and typical households underperformed by 1.4 percent.

The average shlub is losing. Any wonder why the push is on to get the averge person to invest in the market? Its like inviting a poker newbie to the weekly game.

Really their fault, if they want to play in the investor game, do your research.

lol

 

[Whoozyerdaddy]

I'm not so sure that this is such a big deal.

IIRC... Senators are supposed to keep their stock portfolios in blind trusts while in office. It would make sense, considering the prestige of the office, that the people managing those portfolios are the best of the best and would likely out perform the market by quite a bit.

Insiders tend to trade stock in their own companies as opposed to playing the market as a whole. Even still, they probably tend to be a little more educated in the markets as a whole than the basic Joe Sixpack investor.

Average Joe Sixpack investors are either teamed up with Walt, the Morgan Stanley account rep, or trying to do it themselves so it's not so far fetched to think that their portfolio performance is going to lag behind the market.

It's an interesting story and those are some interesting statistics... But I'm not so sure that there is anything improper happening.

 

[Genx87]

Hmm politicians beat insiders more than 2:1

I am sure everything in on the up and up

 

[Kntx]

Originally posted by: Genx87
Hmm politicians beat insiders more than 2:1

I am sure everything in on the up and up

Government usually does things better than the private sector. No surprise here.

 

[Genx87]

Originally posted by: Kntx

Originally posted by: Genx87
Hmm politicians beat insiders more than 2:1

I am sure everything in on the up and up

Government usually does things better than the private sector. No surprise here.

lmao

 

[EagleKeeper]

Originally posted by: Kntx

Originally posted by: Genx87
Hmm politicians beat insiders more than 2:1

I am sure everything in on the up and up

Government usually does things better than the private sector. No surprise here.

True - who else can waste money so easily.

 

[Uhtrinity]

If they were making that in the current market then I would be really concerned.

As the article states:

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.

That was the time to make money in the Stock Market. Now I do believe that members of our goverment should be held to higher ethical standards, 'forced ethics' if you will.

edit: During that same time a friend of my father was making about 2 - 3X his railroad salary per year in the stock market and was able to retire early. It could be done during that time with some research. Shoot, if you boaught google on the day it launched and sold roughly a week later you would have made about 50% on your investment. Just looking at Google history today I wish I had put all my savings into it

 

[1EZduzit]

Just goes to show you who the true "insiders" really are.

 

[MonkeyK]

Originally posted by: Uhtrinity
If they were making that in the current market then I would be really concerned.

As the article states:

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.

That was the time to make money in the Stock Market. Now I do believe that members of our goverment should be held to higher ethical standards, 'forced ethics' if you will.

Again they did better than "insiders" in that market. I would be very interested in seeing more recent results though.

 

[alent1234]

all you had to do is put money in tech in that time to beat the market. Not exactly rocket science.

 

[tweakmm]

Originally posted by: MonkeyK
My new rule proposal: Trade disclosures for senators and others of similar influence must be publicly available for review one business day in advance. Records of trades would be kept indefinitely.

Never going to work, thanks to the wonders of international banking and countries with lax banking laws hiding money is not a problem for a skilled tax attorney.
I would bet the actual percentage is much higher in real life, it's only 12% for the money the IRS knows about.

 

[1EZduzit]

Originally posted by: alent1234
all you had to do is put money in tech in that time to beat the market. Not exactly rocket science.

Then how did the average household lose 1.4%? I think they are refering to averages here.

 

[alent1234]

average person thinks the stock market is the dow jones average, not too much to believe they will underperform.

the times are also important since the market went up, but there were a few crises that caused stocks to go down for a time. In 1998 the market was down 20% - 30% for the year by October and then shot up to finish for a nice gain. Average household could have had mutual funds and never realized the paper losses. Meanwhile the senators read about the various events that caused the crises and pulled their money out. These things were reported in the newspaper. there is also dollar cost averaging. average household averaged and by bad luck bought expensive shares. the senators traded in and out to avoid the falls.

there are a million possibilities without accusing people of insider trading.

 

[1EZduzit]

Originally posted by: alent1234
average person thinks the stock market is the dow jones average, not too much to believe they will underperform.

the times are also important since the market went up, but there were a few crises that caused stocks to go down for a time. In 1998 the market was down 20% - 30% for the year by October and then shot up to finish for a nice gain. Average household could have had mutual funds and never realized the paper losses. Meanwhile the senators read about the various events that caused the crises and pulled their money out. These things were reported in the newspaper. there is also dollar cost averaging. average household averaged and by bad luck bought expensive shares. the senators traded in and out to avoid the falls.

there are a million possibilities without accusing people of insider trading.

But what's the most likely reason??

From the article:

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

 

[techs]

And yet congressman will sell their votes for a free trip to Guam.
Bad, bad businessman. At least the guy in California got 2.4 million for his votes.

 

[kage69]

Hrmmmmm. Not sure what to think about that; I managed 12.3% and didn't do anything special or illegal. Whole portfolio nearly tax free too. Well I must have done something illegal then!

I agree with alent1234, I'm not willing to pass judgement on them over this specifically. Show me something in the way of questionable behavior, a la DeLay, then that's different. Trading votes for stock tips is of course very wrong and violators should have the book thrown at them IMO. Getting good advice and having enough capitol to act on it isn't illegal, although I found the articles mention of the shared success across the board a little disheartening. Maybe the current case against the afore mentioned dirtbag will result in some additional oversight for these guys. I'm really getting tired of being ashamed of my government.


Edit: Forgot the kudos to Max Cleland of Georgia for making that article possible! :thumbsup:

 

[Tom]

Senators are bright, successful people, or they wouldn't be senators.

I wouldn't put much stock in a story like this.