Thursday, May 26, 2011

Insider Traders: the Ruling Class

These studies come out every so often and always have the same results. Nothing else changes, of course--like the law.

An extensive study released Wednesday in the journal Business and Politics found that the investments of members of the House of Representatives outperformed those of the average investor by 55 basis points per month, or 6 percent annually, suggesting that lawmakers are taking advantage of inside information to fatten their stock portfolios.

No kidding!

And House members are not as well-informed (cough) as are Senators:

In a 2004 study, the same professors found that U.S. senators also enjoy a “substantial information advantage” over the average investor — and even corporate bigwigs — when it comes to picking stocks. The latest study shows that members of the Senate outperform their House colleagues by an average of 30 points per month.

All you need to know is which lobbyist you're making happy--or UNhappy--and you're on the right track.

HT: Drudge

3 comments:

Anonymous said...

Yeah, it must be the corrupt Senators and House members making money hand over fist because they have unfettered access to certain information unavailable to the general public.

Their financial gain has nothing to do with some of them being wealthy due to their knack to make intelligent decisions about their portfolio with their money manager without "cheating the system".

Are they not enjoying the fruits of their labor through the wonderful world known as capitalism? Wouldn't a law forcing members of the House and Senate to divest constitute unconstitutional seizure of their property Is there definitive proof, not speculation, that they are financially benefitting from their status as a legislator?

Dad29 said...

Well...

I think it would be VERY smart for Members of Congress to put all their investment bucks into blind trusts, as does the President (and some Cabinet folks.)

That way, there'd be no suspicions.

By the way, do you REALLY think these guys are smarter than every Wall Street money manager?

And do they REALLY have the time to research all those opportunities--because if they have all that time, what the hell do they do about, you know, being a Congressman?

John Foust said...

Did you vote for any of those Republicans, Dad29?