How Congress Members Are Making Millions

You might think that Warren Buffett or Ray Dalio had the best returns in 2021, but the speaker of the house, Nancy Pelosi came on top.

Before Nancy Pelosi was speaker of the house, she was earning $174 000 per year. When she became speaker of the house, she began earning $223 500 per year. But the net worth of her family is estimated to be $114 million. There is no way you can obtain such a high net worth with only your regular income.

Last year, the S&P 500 had a monstrous return of 27%. For perspective, the stock market returns on average 8 to 10% per year. In 2021, Nancy Pelosi’s stock portfolio obtained an enormous return of 45,5%, and her options portfolio returned 66,7%. The question is if Nancy Pelosi is a genius stock trader or does she have access to insider trading?

Nancy Pelosi managed to perfectly sell her stocks right before the country shut down due to the pandemic. She also bought call options on Nvidia right before the American Semiconductor Funding bill passed. She also perfectly timed Netflix right before they announced that they would go into the video gaming business. This is clearly insider trading.

In 2012, congress passed the stock act which forced senators to disclose every single financial transaction no later than 45 days after it took place. This is a step in the right direction but if they break the law, the penalty is $200. This is nothing in comparison to the millions they are making each and every single year from their insider trading.

In 2022, senators are again making millions with oil. Last week, the white house released a statement saying that the US will ban all imports of Russian oil, natural gas, and coal. Due to the law of supply and demand, the price of oil has increased tremendously.

This led some senators to buy and sell stocks. Marjorie Taylor Greene bought stocks like Chevron, Lockheed Martin, and Nextera Energy. These stocks are up 10, 16, and 3% since the start of the conflict. Mark Green invested $1 million into Enlink Midstream on February 10th. Since February 10th, Elink Midstream is up 10%, making him over $100 000.

The ultimate question is if we should allow members of the Congress and Senate to participate in the stock market. Senator John Osof and Mark Kelly proposed that members of Congress and their family members sell their stocks or invest in a blind trust. A blind trust is a fund where a third party invests your money without knowing how your money is being managed. 63% were in favor, 19% were against, and 18% had no opinion.

Nancy Pelosi said that she would be in favor if the other members of Congress supported it as well.

Some people are against and some individuals are for insider trading. A reason for allowing insider trading is that it is very difficult to prove and it isn’t worth spending valuable government resources. The main argument for not allowing insider trading is that it’s simply not fair to other investors.

Final Thoughts

I wrote this article because I wanted to make you aware of the unregulated insider trading that is happening. But the main reason was, of course that we can make money with this.

Because senators are required to post their stock trades, we can know what they think the current state of the stock market is and in which companies they are investing in.

The best site I found for tracking Senate Trading is Quiver Quant

Thanks for reading, have an amazing rest of your day!