Members of Congress Get Abnormally High Returns From Their Stocks

JBeukema

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What's their secret? The report speculates, but does not conclude, it could have something to do with the ability members of Congress have to trade on non-public information or to vote their own pocketbooks -- or both.
A study of senators by the same team of researchers five years ago found members of the higher chamber even better at beating the market -- outperforming it by about 10 percent, an amount the academics said was "both economically large and statistically significant."
Members of Congress Get Abnormally High Returns From Their Stocks
 
Interesting... a 12% better outcome (on average) than all other investors on the market.

Meaning for example, if ALL market investors were getting on average returns of 10%, that set of Senatorial investors was getting an 11.2% return?

Now, let's think about that.

In every market, some investors are going to be getting returns lower than average, and some higher, right? I mean that is how statistical averaging works.

So the question is why would the subset of all investors, those Senators, on average find themselves on the happier side of the median?

We don't suppose that being on top of events both political and social might have something to do with that, do we?

I can see that happening to such an informed and obviously astute group of investors happening entirely without any INSIDER trading going on.

I can easily imagine how such a well heeled group, and such a group with higher than average intelligence and social awareness would, on average outproform the set of ALL other investors.

In fact I would be surprised if that was NOT the case.

Wouldn't you?

I don't think this is the way to investigate for INSIDER TRADING, folks.

In fact, I know it isn't.

If one wants to make a case that any individual is gaming the market on Insider information, one needs to look at that SPECIFIC investor.

This implied charge appears to me to is rather silly.

It appears to be finding Sentors guilty by association.

And really, folks, you KNOWN that I have a THANG about the INSIDER CLASS, too, right?

So you know that my inherent prejudice would be to WANT to agree with the premise, too right?

But these STATS really do not, at least as far as I can intuit,suggest a pattern of insider trading at all.

In fact, what they seem to show is pretty much what I'd expect from such a small CLASS of players when compared to the set of ALL other INVESTORS.

That smarter players, people who are on top of social developments are LIKELY to outproform the set of ALL OTHER INVESTORS.

And a 12% better proformance is significant, but hardly indicative of fraudulant insider trading.

Remember, they didn't average a return of 12%, but a return that was merely 12% better than average.

That is entirely believable and NOT I think, leading me to the conclusion that Sentators AS A CLASS, are corrupted in they way the authors SEEM to be inplying

I do NOT think there's a "smoking gun" here, folks.
 
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Corporate profits unexpectedly fell in the first three months of the year...
:eek:
US economic slowdown confirmed by growth figures
26 May 2011 - US growth slowed in the first three months of 2011 to an annualised rate of 1.8%, which is a 0.4% quarterly rise, the Commerce Department has confirmed.
This compares with an annualised growth rate of 3.1% in the final three months of 2010. The slowdown was blamed on corporate profits unexpectedly contracting for the first time in more than two years. Many analysts had been expecting the growth figure to be revised upwards to about 2%.

'Soft patch'

US GDP is expressed as an annualised rate, or annual pace, which shows what the three months' economic activity would mean if it carried on for a year. Growth in consumer spending, which accounts for more than two-thirds of US GDP, was revised down from 2.7% to 2.2%.

That was balanced by an upward revision to the amount of money businesses were spending on restocking, which was increased from $43.8bn (£26.8bn) to $52.2bn. "There is no doubt the economy has slowed. We will call the first half of 2011 as a soft patch," said Robert Dye at PNC Financial Services in Pittsburgh.

BBC News - US economic slowdown confirmed by growth figures
 

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