Announcement

Collapse
No announcement yet.

Want Stock tips? Ask your senator.

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Want Stock tips? Ask your senator.

    http://search.ft.com/search/article....d=040224007191
    Senators' stocks often outperform market
    By Deborah Brewster in New York
    FT.com site; Feb 24, 2004

    US senators' personal stock portfolios outperformed the market by an average of 12 per cent 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.

    He admits to being "very surprised" by his findings, which were based on 6,000 financial disclosure filings and are due to be published in the Journal of Financial and Quantitative Analysis.

    "The results suggest that senators knew when to buy their common stocks and when to sell."

    First-time Senators did especially well, with their stocks outperforming by 20 per cent a year on average - a result that very few professional fund managers would be able to achieve.

    "It could be argued that the junior senators most recently came out of private industry, so may have better connections. Seniority was definitely a factor in returns," says Prof Ziobrowski.

    There was no difference in performance between Democrats and Republicans.

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

    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 calender year.

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


    When adjusted by the size of stocks, the total portfolio returns outperformed by 12 per cent a year on average. The study used a total market index as the benchmark for comparison.

    The study took eight years to complete because there was no database of information and the documents had to be gathered and examined manually. Stocks held in blind trusts are not included in the disclosure documents.
    2005 Mandatory Loyalty Oath: I love America, our troops, baseball, Moms, and certain pies. I want no harm to come to any of those institutions, nor do I take any glee in their demise.

  • #2
    From Fark. Great site.

    Comment


    • #3
      Fark is Patrick on speed.
      The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life. -TR

      OFFICIAL LOUNGE SPONSOR OF NEW YORK CITY, TEDDY ROOSEVELT AND THE MARYLAND TERRAPINS

      Madyaks2 Thought Of The Day: I'm just as dumb as madyaks1.

      Comment


      • #4
        Originally posted by lasvegasreb@Feb 25 2004, 06:03 PM
        Fark is Patrick on speed.

        Comment


        • #5
          Originally posted by pgrote@Feb 25 2004, 06:00 PM
          From Fark. Great site.
          Yeah - I've noticed you lifting things from there too. Do you post over there? Under what name? I post under trig, but very, very rarely.

          Just the occasional "I'd Hit It!"
          2005 Mandatory Loyalty Oath: I love America, our troops, baseball, Moms, and certain pies. I want no harm to come to any of those institutions, nor do I take any glee in their demise.

          Comment


          • #6
            Originally posted by Trigfunctions+Feb 25 2004, 06:07 PM-->
            QUOTE(Trigfunctions @ Feb 25 2004, 06:07 PM)

          • #7
            Originally posted by Trigfunctions@Feb 25 2004, 06:07 PM
            Yeah - I've noticed you lifting things from there too. Do you post over there? Under what name? I post under trig, but very, very rarely.
            pgrote. Total Fark account, but don't really post.

            Comment

            Working...
            X