This is cool but I think it gives people a false sense of security that their lawmakers aren't taking financial advantage of the positions they're in. Surely if a Senator came across a lucrative but illegal opportunity to profit off of some kind of information they become privy too, they'd do it in a way that will bypass the Senate Financial Disclosure Database, such as having friends/family trade by proxy for them, selling that valuable info to the highest bidder and getting paid in bitcoin, etc.
This is a reasonable concern. And indeed we only (currently) track holdings of publicly-traded securities, where for some senators a decent fraction of assets are in privately-held companies or things like property investments. We take some solace in the fact that officials are required to disclose trades by spouses + dependents (which we include in our calculations), but you're right that we could be missing more illicit activity.
We hope that this work highlights potential dangers of allowing officials to trade in individual stocks, and encourage more robust legislation that would limit the sort of activity you're describing. Obviously very idealistic, but that's the goal.
Why do you care about a Ukranian gas company's hiring practices? If they want to waste money overpaying for an unqualified board member simply for name association that's on them. Nobody in this country is affected. The better question is what is the current President's unqualified son-in-law doing handling middle east peace talks AND heading the coronavirus task force. Those things definitely do impact Americans.
Do you have any evidence, even circumstantial that points to Biden getting his son on that board?
Seems a lot more likely that the board recruited the son to the board hoping it would provide political cover. Which it also does not appear to have worked since Biden requested the dismissal of the AG that had already closed investigations into Barisma.
It's good that you have the S&P as a benchmark. It shows that the median performance of a senator (4%-6%) is lower than expected (10%). Can you add the S&P to the histogram so it's always there? That would make the difference more obvious.
True although it's not quite that simple. Most senators have less risky portfolios than the S&P 500 with lots of bond ETFs and the like, so that's not a perfect comparison. We're working on creating a risk-adjusted return measure to provide a more accurate comparison.
They should actually regress senator returns against Ken French's research factors [1] and measure the statistical/economic significance of the intercept and the volatility of the residuals.
If I return 2% per year, but do so at 1% volatility and zero market exposure, then I can be a highly successful hedge fund after applying 10x leverage.
Where does this signal come from in a time-sequence series? I looked up "common mode signal" and in EE it looks like line to line interference, or line to ground interference. Does the existence of this signal presume a Senate's portfolio performance is somehow coupled to some index fund performance (S&P in this case)?
If the senators use this data and that argument to prove they didn’t make too much money or didn’t do anything wrong, then please remove all insider-trading laws. Right now, it only hurts the law abiding minority that accidentally makes a mistake
It's hard to accidentally insider trade and very hard to get prosecuted for accidental insider trading in the United States. Europe, maybe. But not the US.
People working for the government should only be allowed to either have some certificates or nothing at all.
Countries ask their youth to die for them and they can't just ask people with knowledge that makes trading unfair to just restrict to "bad" options while they hold secrets.
Not that it matters anyways as they probably still take advantage of things through other people. I'd be pretty good to have a way to really prevent that as this is a problem probably in every country.
This is awesome, but is this accurate? The largest holding listed is Susan Collins with a $37mm investment in 3M... Everything I can find from a google search suggests she is not really that wealthy.
Hey Alex, it's as accurate as the data the senator's report, but we've noticed a lot of inaccuracies that are later corrected - maybe some haven't yet been corrected?
Two points on that specific trade: 1) stocks include an entire family's holdings, and the 3M position is held by her husband, 2) We have to estimate the value of ranges that are reported, and we've chosen to use the midpoint but the lower end may be more true (e.g. $5,000,001-$25,000,000 is estimated to be $15,000,000)
This is great. If I had the patience I would write some script that alerts you when there are major sell offs. The last crash was preceded by heavy sales by a few senators that were exposed to data and knew how serious the COVID19 thing was before the public.
There is a significant reporting lag, between the actual stock sales and the notification on the tracker. For example, the
sales of Sen Loeffler that were widely reported in the news, were not released until 12 March, for transactions in early February. The stock market as a whole had already significantly declined, but was still a ways from its low, on that date.
They also probably don't have a sufficient fraction of their net worth in public stocks to make insider trading worth the risk of the repercussions of being caught doing so.
It wouldn't matter anyway. Congress is exempt from insider trading laws. It is perfectly legal for members of Congress to trade based on any information, public or not.
I don't think it counts as inside trading. If a senator hears expert discussions about a pandemic in China and sells all his stocks - does that count as insider trading?
Does this include dividends in returns? Most senators are older (closer to retirement), I am assuming they invest more in dividend stocks and bonds than growth stocks.
We use adjusted close data pulled from Yahoo Finance to calculate daily returns. Adjusted close prices include adjustments for all applicable splits and dividend distributions.
It looks like the site is struggling under the load, so below is a screenshot of the homepage showing an overview. Certainly some outliers but they'd require significant research to understand.
Readit News
We hope that this work highlights potential dangers of allowing officials to trade in individual stocks, and encourage more robust legislation that would limit the sort of activity you're describing. Obviously very idealistic, but that's the goal.
Seems a lot more likely that the board recruited the son to the board hoping it would provide political cover. Which it also does not appear to have worked since Biden requested the dismissal of the AG that had already closed investigations into Barisma.
If I return 2% per year, but do so at 1% volatility and zero market exposure, then I can be a highly successful hedge fund after applying 10x leverage.
[1] https://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data...
Not that it matters anyways as they probably still take advantage of things through other people. I'd be pretty good to have a way to really prevent that as this is a problem probably in every country.
Two points on that specific trade: 1) stocks include an entire family's holdings, and the 3M position is held by her husband, 2) We have to estimate the value of ranges that are reported, and we've chosen to use the midpoint but the lower end may be more true (e.g. $5,000,001-$25,000,000 is estimated to be $15,000,000)
Here's the link to the original filing (have to accept terms first): https://efdsearch.senate.gov/search/view/ptr/0c76c4e6-afb1-4...
Link (you have to accept the initial terms of use thing, and then reload that link): https://efdsearch.senate.gov/search/view/ptr/370492b8-ed0a-4...
This might be interesting to see what other people are doing with the Senate Financial Disclosure Database: https://www.opensecrets.org/personal-finances
https://i.imgur.com/W4WgxX0.png