at-81,-she-rules-the-roost-and-the-best-stock-market-investments

At 81, she rules the roost and the best stock market investments

“The problem of Wall Street in Washington: should the powerful be allowed to trade?”, headlined yesterday FinancialTimes. Since the beginning of the year, the debate has grown. In its center, the name of Nancy Pelosi. The Speaker of the United States House of Representatives, a major parliamentary figure in Washington, follows in parallel with her duties a sustained activity in stock market investment.

Sometimes (often ) by taking advantage of his power and his information to carry out transactions a few days before big announcements on the markets.

The most popular of his operations was the acquisition of options of purchase on Tesla, a few hours from a new legislation on the credits of electric cars. Earlier, Nancy Pelosi had also chosen options to buy Amazon, days before the Pentagon canceled the JEDI contract for Microsoft, leaving Amazon a favorite to win this huge sale at 10 billions of dollars. According to multiple analysts tracking her investments, the Legislator’s portfolio beats the market hands down.

“Her trades beat the market – currently, she is up from 40% on its options position, with an average stock market return of 40%. For context, the S&P500 only rose by 39% in 2021”, said Unusual Whales, a platform that lists activities on the stock exchange political figures. Faced with the law, Nancy Pelosi like her parliamentary colleagues are obliged to make public all the information on their investments, hence the transparency on the operations of the octogenarian.

An ETF launched to ease the debate

Is this therefore insider trading? Under the law, in France as in the United States, insider trading includes any offense committed by a person who uses the privileged information he holds to carry out profitable stock market transactions. But since 2020, the American stock market policeman is limited by the Supreme Court as to his penalties. And Nancy Pelosi’s affair seems to slip through the cracks.

Asked about the legitimacy of her investments on the stock market, the president of the lower house replied: “it is a free market economy” and that legislators “should be able to participate in it”. Conversely, according to a study recently published by the Convention of States, 63% of Americans think members of congress have an “unfair” advantage in financial markets, and only 5% agree they should be allowed to invest.

“How can you ask a member of Congress to make a decision about health care and regulate the health care industry or tax medical devices, then that they are loaded with stocks of health care companies? This is an inherent conflict of interest” , added to the Financial Times Richard Painter, a former ethics lawyer at the White House, during the administration of George W Bush.

“I think the American people understand why this is problematic. This undermines their trust in the government. It gives the impression that they are really there to serve their own financial interests rather than serving the public good”, declared Virginia Canter, the former chief ethics officer for Presidents Barack Obama and Bill Clinton, now working for a rights group in Washington.

© Unusual Whales

Currently, Nancy Pelosi has investments in Apple, Amazon, Alphabet, Micron Technology, Netflix Roblox, Salesforce or even The Walt Disney and Visa. To be able to grant individuals the opportunity to also benefit from Nancy Pelosi’s information, the Unusual Whales platform has launched an “ETF” revealing the distribution of his portfolio and the daily history of his stock market transactions.