Senators' stocks outperform market

[RCNelson]

Senators' stocks often outperform market

NEW YORK - U.S. senators' personal stock portfolios outperformed the market by an average of 12 percent a year in the five years to 1998, according to a new study.

"The results clearly support the notion that members of the Senate trade with a substantial informational advantage over ordinary investors," says the author of the report, Professor Alan Ziobrowski of the Robinson College of Business at Georgia State University.

. . . .

There was no difference in performance between Democrats and Republicans.

A separate study in 2000, covering 66,465 U.S. households from 1991 to 1996 showed that the average household's portfolio underperformed the market by 1.44 percent a year, on average. Corporate insiders (defined as senior executives) usually outperform by about 5 percent.

The Ziobrowski study notes that the politicians' timing of transactions is uncanny. Most stocks bought by senators had shown little movement before the purchase. But after the stock was bought, it outperformed the market by 28.6 per cent on average in the following calendar year.

Returns on sell transactions are equally intriguing. Stocks sold by senators performed in line with the market the year following the sale.

The full article is HERE.

One of the factors slowing down an economic recovery is that people see stock investments as a suckers game.

 

[iain]

Clearly US Senators are simply more intelligent that the general population with a better understanding of the economics of the market; or at least rich enough to employ people with these abilities.

(Should there be a smiley here? I'm not sure).

 

[shemp]

I don't expect any of them will be making doilies and arranging flowers in prison.

 

[Ed]

Senators' stocks often outperform market
The full article is HERE.

""The results clearly support the notion that members of the Senate trade with a substantial informational advantage over ordinary investors," says the author of the report, Professor Alan Ziobrowski of the Robinson College of Business at Georgia State University."


One of the factors slowing down an economic recovery is that people see stock investments as a suckers game.

Prof. Z is an idiot.

Assuming that their money is managed (a good assumption) NOT doing 10 points above the Dow would show massive incompetence on the part of the manager. This idiot clearly has some wierd agenda since it would be difficult to be so stupid as to not be aware of that.

Academics, fah.

 

[iain]

Re: Re: Senators' stocks outperform market

Assuming that their money is managed (a good assumption) NOT doing 10 points above the Dow would show massive incompetence on the part of the manager.

Is this true? There's been a lot of research on this and, as far as I know, managed funds rarely outperform the average over any reasonable period of time.

 

[Ed]

Re: Re: Re: Senators' stocks outperform market

Is this true? There's been a lot of research on this and, as far as I know, managed funds rarely outperform the average over any reasonable period of time.

I suppose that there is regression to the mean if the fund is not changed. The point is that these funds are monkeyed with on an ongoing basis. I don't personally uses a public fund, my financial guy sets up micro funds for investors and they tend to perform better than stuff like this .

It sorta also depends on how you define "the market". If you define the market as NASDAQ and compare the value of a DOW index fund to that over 5 years, you would be looking at a 26% increase. Over the same period, the Dow is up 6% (really rough, no one jumps in at a point in time).

Now, if this lieing, sniviling, agenda driven, pinko commie bastard academic chose 1 one year time horizen, you might see a 20% difference vs. the Dow even with a plebe mutual.

The point is that if you invest wisely with a good advisor you can beat the Dow easily.

 

[The Central Scrutinizer]

Re: Re: Re: Senators' stocks outperform market

Is this true? There's been a lot of research on this and, as far as I know, managed funds rarely outperform the average over any reasonable period of time.

Managed funds and managed portfolios are two different things. I would suspect many of the congressmen have managed portfolios.

 

[The Central Scrutinizer]

One of the factors slowing down an economic recovery is that people see stock investments as a suckers game.

An economic recovery has nothing to do with the stock market. They are 2 seperate things.

And, only suckers see stock investments as a suckers game.

 

[a_unique_person]

Clearly US Senators are simply more intelligent that the general population with a better understanding of the economics of the market; or at least rich enough to employ people with these abilities.

(Should there be a smiley here? I'm not sure).

No. Politicians would be, on average, smarter than the average man in the street. Many of them are highly intelligent, or blessed with a ruthless, rat like cunning. The perfect qualities for investing in shares. I would also expect, not so much insider trading, as a good awareness of what stinks ahead of the rest of us getting a whiff of the smell. That is, the general rumour mill, that is eventually printed in the press.

 

[Blue Monk]

I'm curious as to how this study was done.

Are Senators required to make full economic disclosures? I was under the impression that they weren't and that policticians in this country are entitled to keep the details of their personal finances private as any citizen can.

I'm sure a great deal can be deduced but I question how one could have access to this data in a fine enough detail to make an accurate assesement.

Or am I incorrect in what public officials must disclose about their private finances?