TikTokers have caught on to
the fact that the stock portfolios
of members of Congress tend to
outperform the stock market.
So, they're tracking the financial
disclosures of these lawmakers and
Investing in the same stocks that
our corrupt lawmakers are invested
in, seems pretty smart.
Now, here is one example of
a TikToker saying that he's doing
just that.
>> Shout out to Nancy Pelosi,
the stock market's biggest whale.
Apparently she's decided to go very
heavy in tech stocks.
I'm going to show you guys which
ones she bought.
According to our financial
disclosure form, she bought Google,
Amazon, Apple in a video.
This can be considered very good
for all of these stocks and she's
invested over $11 million in all
of these positions put together.
Shout out to Nancy Pelosi for
the stock tips.
>> Yeah, shout out to Nancy Pelosi
who has access to
insider information and
can make some trades on that.
Now, of course, she claims, no, no,
I have nothing to do with this.
I'm not investing in anything.
There's no insider
trading happening.
We'll get back to that in
just a second.
Now, the TikToker that we just
showed you seems to be unaware of
how things work.
Unaware of the fact that there's
some corruption taking place here,
which is why these lawmakers
are doing so
well in their stock portfolios.
But there are some other TikTokers
who are aware of the corruption.
And, his thought is, well,
if I can't beat them,
why not join them?
Let's watch.
>> And would you look at that
literally clockwork.
The US government has an agreement
to purchase a supercomputer from
who else, in video.
Yep, in video, the one that Nancy
bought back on 7/23/21 in that
tweet the news comes out literally
yesterday like a 8/24/21 she knew.
>> All right, so that TikToker with
the fun music in the background was
Chris Josephs, who keeps
close track of the investments made
by these lawmakers.
And of course we know about
the investments they make about
the stocks that they sell,
the stocks they buy, thanks to
their financial disclosures, and
that's what Josephs is looking at.
Now, in the past year and a half,
Josephs has been taking advantage
of a law called the Stock Act,
which requires lawmakers to
disclose stock trades and those of
their spouse's within 45 days.
He's personally investing when he
sees which stocks are picked.
By the way, let me just
pause for a second.
I'm not doing this segment to give
you guys financial advice.
In fact, this
is not a financial advice show.
Do not take any financial advice
from anyone who's not a certified
financial advisor, a fiduciary,
specifically.
I'm doing a story because the fact
that members of Congress can invest
in individual stocks.
And the fact that members of
congress have control over
legislation that impact these
businesses is wrong,
it should be banned and outlawed.
Okay, let me continue.
Josephs says this, I'm sure a lot
of people agree with it.
I'm at the point where if you can't
beat them, meaning members of
Congress, join them.
I typically do buy the next one she
does I'm going to buy.
So that's what he's doing,
that's his whole strategy.
In fact,
he offers a service that gives you
notifications on your phone as soon
as a member of Congress has made
a financial disclosure.
So far this year, by the way,
this is relevant.
Senate and House members have filed
more than 4,000 financial
trading disclosures, get this, with
at least 315 million of stocks and
bonds bought or sold.
So, for the longest time wondered,
why does anyone want to serve in
Congress if they don't use that
position of power for good, right,
what's the point of having power
for power's sake, right?
Imagine although incredible things
you could do to improve
people's lives.
Instead they spend all their
time fundraising,
they spend all their time kissing
up to corporate interests.
And so I was like, I don't know it
seems like a miserable existence,
why do they do it?
Well, there's a giant perk if
you're a member of Congress.
Again, you have access to insider
information, [LAUGH] and you get to
trade on that insider information.
Which is why if you look at data,
if you look at studies into this,
members of Congress have stock
portfolios that outperformed
the stock market.
Now an assistant professor at
Augusta University who's been
studying the trend told NPR this,
investors perceive that senators
may have insider information, and
we see abnormal
positive returns when there's
a disclosure by a senator.
And by the way, at least one
financial services consultant is
planning to set up a financial
instrument that automatically
tracks congressional stock picks.
Because in his view,
lawmakers are, quote,
probably privy to more information
than just the general public and
guess what, they are.
Let's watch.
>> In March 2020, news spread that
four US including Burr were being
investigated for insider trading.
>> Of the drastic escalations in
this pandemic,
while still reassuring citizens
that the US was prepared.
>> Senator Burr vehemently denies
the allegations against him, but
here's what we know.
On January 24th, the Senate Health
Committee held a briefing with
CDC Director Robert Redfield, and
White House pandemic advisor
Dr Anthony Fauci according to
The Washington Post.
About two weeks later, Burr and
Tennessee Senator Lamar Alexander
wrote a Fox News editorial that
the US was better prepared than
ever to deal with a pandemic like
the coronavirus.
Less than a week later,
the Dow set an all time record,
hitting just over 29,551 points.
On February 13th,
bursal between $630,000 and
1.7 million worth of investments.
He did it in 33 separate
transactions and
he didn't buy a single share.
I mean, that was just Senator Burr.
But this is a long standing
practice.
This is a huge problem.
Because, again,
it's not just about Congress people
enriching themselves
which is pretty gross as it is.
If they're legislating and
making decisions on regulations,
for instance, are they really
going to want to pass legislation
that regulates businesses at that
then leads to losses and profits?
Hurts the money that they earn,
right, earn through the stock
market.
I mean, obviously is a huge
conflict of interest,
huge conflict of interest.
They should not be invested in
individual stocks.
In fact, Nancy Pelosi claim she's
not invested in individual stocks,
which is a flat out lie.
She's like,
I don't manage my stock portfolio,
someone else does.
Come on, come on, really?
So you have a financial advisor or
a money manager who does it for
you and you're completely in
the dark about what kind
of investments are being made?
You think we're going to believe
that garbage?
Come on, come on.
It's pathetic, and by the way,
her husband is invested in
individual stocks.
Her office like mentioned,
someone else handles her stock
portfolio and her husband,
her husband deals with it too.
Yeah, that's her husband.
Like they live together in the same
household.
They have the same interests.
It's just so stupid.
Anyway, there are some members of
Congress who are trying to fight
back against this,
although there's a lot of pushback.
For instance,
Congressman Raja Krishnamoorthi,
a Democrat from Illinois is part
of a bipartisan group of House and
Senate members who have introduced
legislation banning lawmakers from
owning individual stocks.
Unsurprisingly, he has
run up against a lot of opposition
to the idea.
And I want to just briefly
mentioned one of the studies that
kind of track the stock portfolios
of members of Congress compared to
the overall stock market, and
here's what they found.
The study abnormal returns from
the common stock investments of
members of the United States House
of Representatives found that house
members earn statistically
significant positive
abnormal returns, outperforming
the market by 6 percentage points.
Senators, by the way,
do even better.
The authors say, citing their own
earlier research from 2004.
Senate portfolios show some of
the highest excess returns ever
recorded over a long period of
time, significantly outperforming
even hedge fund managers with gains
that are both economically large
and statistically significant.
And just quickly going back to
the financial disclosures.
There's been a trend
lately of lawmakers failing to do
the financial disclosures that
they're supposed to do.
And then they have all sorts of
excuses for why that's the case.
My question is,
are there ever going to be
any consequences for that?
And are we ever going to get
an independent body outside of the
House or Senate ethics committee to
investigate the insider trading
that's happening right now.
The thing is unique members of
Congress to pass legislation to
make that happen.
That's really hard to do when
the same members of Congress
are enriching themselves with this
type of behavior