I'm more than willing to believe there's insider trading, but the data presented at the beginning is not convincing.
> Of the 496 trades [Filler has] made since 2014 in Alabama’s ServisFirst Bancshares Inc., where he sits on the board of directors, and Century Bancorp Inc. of Massachusetts, where he’s the largest shareholder, 372 of them, or 75%, have shown a profit three months later.
> Besides Filler, other TipRanks stars include Steve Mihaylo, the CEO of telephone services company Crexendo Inc., where he owns a $60 million stake. Mihaylo has turned a three-month profit on 83% of his trades over the past five years even as Crexendo’s shares have seesawed.
We've also had an unprecedented bull market over the past 10 years. If you pick any random stock at any time and hold it for three months, what are the odds that it will be worth more?
The article compares the returns to the S&P500, but that is the net performance of those 500 stocks. You'd have to compare it to the base rate of picking a random stock to see if it's actually remarkable.
Maybe the S&P 500 performed lower because 75% of the stocks in it went up and 25% went down. But that means that if you randomly pick one stock, you'd have a 75% chance of it being one of the ones that went up, and you'd outperform the S&P500. (Well, not quite, maybe it could go up, but not as much as the S&P500 as a whole. But still, most of the stocks that go up, would have to go up more than the average of the whole index in order to compensate for the ones that go down)
Later in the article, when they mention that insiders tend to reliably sell stock ahead of bad news, that seems much more damning.
It’s worse than that, those tasked with overseeing the market, including Federal officials, are also trading on inside information with impunity, from Pelosi to Powell
That story says that Powell had owned a relatively small allocation of munis for years, before the Fed bought munis as part of QE triggered by an unexpected pandemic, which makes perfect sense given their aims. Very hard to call that insider trading in general, and it hardly even seems morally dubious compared to what people like Pelosi seem to be up to.
The only way to win in financial markets is to NEVER PLAY!
I was 100% out after 2008 (I saw it coming; I saw the Dot Com crash coming - I finally realized the entire system is utterly corrupt and only "the house" wins - you are NOT the house.
Regulators have too much power and influence on markets - they're worried about market manipulation but as far as I'm concerned they are the only ones manipulating markets.
Remember, you can trade stocks without trading stocks.
What do I mean? Mark Cuban sold a collar on his Yahoo stock through Goldman for $[I forget] billion dollars. That was an off-market trade in which someone bought his entire block off of him. In today’s world, with tons of low interest (as in, single/double-digit basis points) loans and other fun weird contraptions, you have a lot more options to trade without trading.
I have no grand reveal here, but there’s probably an entire “dark dataset” regarding that activity that is missing from this conversation.
Both people involved are now deceased, and while I heard this story from one of the principals, I have my doubts. But fwiw: I knew a guy who was close buddies with the outside accountant for a Fortune 500 company. One of the accountant's duties was to file a quarterly document with the SEC with the company's financial results. That was before this was done online. The contents of the document, before filing, were very confidential and using or disclosing them would have been illegal inside trading. However, as the story goes, the instant the document was in the SEC's possession, its contents were considered public and people with the info were allowed to use it (maybe not the accountant himself because of some special rules).
And so, according to how I was told, the accountant, after dropping off the document and walking out of the SEC building, would pull out his cell phone and call his buddy from the front steps with the relevant info. The buddy would then make trades on the now-"public" info that no one else yet knew, because it was still on a piece of paper in the SEC office that no one had yet looked at.
Could it really have been that easy? This would have been the 1980s or so, I think. I think they had cell phones then, but if not, they had pay phones.
It probably happens even more now than in the 1980s.
The speed of communication outpaces the speed of government bureaucracy so it’s easy to take advantage of a technicality to make huge profits.
It’s like university exams when a friend in a morning class would take an exam and then tell others in the afternoon class about the questions and what to expect before taking the exam. The no guarantee the exams would be the say, but even if some questions overlap it makes a big difference.
In the case of university, I’m pretty sure this would be some kind of honor policy violation with repercussions if found out, and for Wall St it’s probably not even as tough as uni.
The original handheld "brick" phone, the https://en.wikipedia.org/wiki/Motorola_DynaTAC , came out in 1984. This was the beginning of the period when cellular phones were seen as expensive status symbols and specialist equipment. (In fact the phones were often still carphones and transportables https://www.mobilephonehistory.co.uk/arcticles/80s_brick_pho... .) Then in the early '90s, about the time that GSM digital service came in, prices began to drop sharply and wide adoption began. (One sign of the change which got some attention at the time was that the SWP https://en.wikipedia.org/wiki/Socialist_Workers_Party_(UK) , a somewhat ersatz radical-left UK fringe party, was seen using mobile phones to organise its then very successful steet demos.)
With paperwork usual delays it would be a superb edge.
I can witness the same structure at my job. We all see stuff (not financial related) the public is not aware of. It would be easy to take advantage of that.
The idea that some people will not use their knowledge to game the system is absurd. I know there's ways of tracking down people via trading patterns but what's to stop an insider selling information to someone completely untied to them and profiting that way? As long as it isn't made obvious by the trader, that would be an untraceable form of insider trading.
Maybe we should just demand all information be open.
There was an Addams family episode way back where Gomez was depressed because everything he did would win big. So he decided to dump all of his shares of some stock that he knew was going to go up. And when news spread that he’d done it the stock tanked and he ended up “winning” because he saved so much money by selling before the huge dip. I’ve always thought that was interesting.
> "In two decades the SEC hasn’t brought a single insider trading case involving trades made under a 10b5-1 plan."
Ladies and gentlemen of the jury: the defendant changed his 10b5-1 plan multiple times, and one of those times he profited hugely from it. The defendant's excuse that his advisor told him to do it and he needed the money for his daughter's college is just unpersuasive.
Anyone see why a prosecutor might be reluctant to bring such a case? It might well be true, but the jury may or may not stay awake long enough to agree. Best to concentrate scarce resources on cases you CAN win.
Note that I'm not saying insider trading is harmless; just that it's like illegal drugs: no policies will stamp it out entirely.
Nancy pelosi's trading returns beat every well known investor, she is running far lower amounts of capital, but shes averaging 70% a year. Meanwhile, the rest of us slave away at our jobs like cattle, and listen to her speak on TV about "fighting for our rights, justice, equality"
It would be nice if Nancy Pelosi were not the classic strawman here. I don't excuse her behavior either but it's totally legal for now and there are so much worse out there.
Yet they never come up it's always Nancy Pelosi and that's just creatively bankrupt. So here are 36 more...
> Meanwhile, the rest of us slave away at our jobs like cattle
Dehumanizing, isn't it? Working hard to contribute to society while these people accumulate 10, 100, 1000 times our yearly salaries in seconds by playing some market. The world we live in is so absurd, it's such a joke.
70% does not come close to beating every well known investor, including her investor husband. She had a good year. When that happens 100-200% returns are not unheard of. Once you annualise the numbers it becomes far more pedestrian.
Does that 70% figure come from someone modeling out her portfolio based on the filings? I'd love to see it if it's public. Just as a gut reflex that seems high even with someone who had the amount of inside info she has, but not saying it's impossible.
Is there a way to "index-fund" Pelosi's investments? More generally, "index-funding" the investments made by politicians who are in a position of power would be a really interesting thing.
So i researched your claim, i found a twitter thread and a Greenwald post supporting you, but with no data (i did not find the 70% returns/year averages) and then i found this[0] that explain how well her husband ran during the pandemic (TBF he ran as well as i did, 40% returns, better than when i was playing online poker, with a lot less time invested).
In any case, this is distasteful and gross. Every bill should have an estimated impact on publicly traded companies, and politicians with stocks should be forbidden to discuss/mediate the bill, and only vote on it.
I hate that she's a hypocrite. But there are so many better people then her in the party (e.g., Wyden & AOC), and it's not like I'm going to run and join the dumpster fire known as the QOP. I mean, what is the QOP really doing to help? Nada, they've just made it 12 trillion times worse from 2000-2008 and 2016-2020 (Ignoring the 80's entirely). At least the dems are helping the middle class every day even if some are stealing while doing it. Better than just a cross-shaped boot in the face while stealing.
Imagine an alternate reality where all stock holding info is public, with names attached, (Everyone's! Including yours!). There are also no insider trading rules.
Such a system seems possibly fairer and more efficient than what we have now.
No, because swaps are a thing. Ie a bank will buy a stock on your behalf in its name, write a derivative to you for the economics of the price return/loss on the side. This is very common today and has the effect of defeating disclosure requirements.
How do you think we got that miraculous bounce post-Covid?
The Federal Reserve had to step in with ~$8 trillion and start buying stocks.
Two Fed presidents had to step down recently due to their stock holdings.
They had to do this to save everyone's retirement accounts and the housing market.
And now we have inflation and this will get blamed on the President's policies. It has nothing to do with that, it's this massive injection of cash into the system. They may have gone a little overboard.
They are trying to slowly unwind this. Until then it's "party like it's the 1920s".
Considering that they have been going at the problem for more than half a century, and if anything, making negative progress, perhaps there is a better approach.
How about: make all trades 100% transparent in real time, and nevermind the insider trading laws? If Jack Smith, the CFO of XYZ Corp, sells 300 shares at 11:04:00 AM, you can know about it by 11:04:01. Sure, Jack still has an advantage, but now his trade is ACTUALLY providing information to the market.
It is one thing for TipRanks to provide analysis two days after, another thing for them to be able to do it in almost real-time, or setup a Fast Follower fund...
Seems there's only good to be gained here, and the insiders won't have to worry about prosecution.
I honestly believe the only way out of this would be to stop trading for the general population, by enacting strong regulation. Having all middle-class adults be experts on stocks, NFTs, what new fork some shitcoin is having, etc., is a huge waste, and ultimately funnels more money to the wealthy class, that obviously have information and capital advantages.
If society keeps seeing investing as an absolutely necessary thing for financial stability, we can't expect politicians and executives to not be corrupted.
If you think insider trading is bad, wait til you see what the Federal Reserve board gets to do, all completely legally, in currency markets. They write their own paychecks out of thin air.
Is it really rigged though? The main driver gains has always been information arbitrage. Where the successful investor knows something about the market that noone else does.
Nowadays a lot of information is out there and nothing stops you from trading like the Senators. The information out there. Well, it's on finclout at least.
[+] [-] imgabe|4 years ago|reply
> Of the 496 trades [Filler has] made since 2014 in Alabama’s ServisFirst Bancshares Inc., where he sits on the board of directors, and Century Bancorp Inc. of Massachusetts, where he’s the largest shareholder, 372 of them, or 75%, have shown a profit three months later.
> Besides Filler, other TipRanks stars include Steve Mihaylo, the CEO of telephone services company Crexendo Inc., where he owns a $60 million stake. Mihaylo has turned a three-month profit on 83% of his trades over the past five years even as Crexendo’s shares have seesawed.
We've also had an unprecedented bull market over the past 10 years. If you pick any random stock at any time and hold it for three months, what are the odds that it will be worth more?
The article compares the returns to the S&P500, but that is the net performance of those 500 stocks. You'd have to compare it to the base rate of picking a random stock to see if it's actually remarkable.
Maybe the S&P 500 performed lower because 75% of the stocks in it went up and 25% went down. But that means that if you randomly pick one stock, you'd have a 75% chance of it being one of the ones that went up, and you'd outperform the S&P500. (Well, not quite, maybe it could go up, but not as much as the S&P500 as a whole. But still, most of the stocks that go up, would have to go up more than the average of the whole index in order to compensate for the ones that go down)
Later in the article, when they mention that insiders tend to reliably sell stock ahead of bad news, that seems much more damning.
[+] [-] grey-area|4 years ago|reply
https://www.bloomberg.com/news/articles/2021-10-01/clarida-t...
https://www.dailymail.co.uk/news/article-10004691/Fed-Chairm...
The President of Robinhood is front-running customers with impunity.
https://mobile.twitter.com/EpsilonTheory/status/144326659925...
There are regulations but no enforcement except for smaller players within the financial industry.
[+] [-] carnitine|4 years ago|reply
[+] [-] xyzzy21|4 years ago|reply
I was 100% out after 2008 (I saw it coming; I saw the Dot Com crash coming - I finally realized the entire system is utterly corrupt and only "the house" wins - you are NOT the house.
[+] [-] deevolution|4 years ago|reply
[+] [-] numair|4 years ago|reply
What do I mean? Mark Cuban sold a collar on his Yahoo stock through Goldman for $[I forget] billion dollars. That was an off-market trade in which someone bought his entire block off of him. In today’s world, with tons of low interest (as in, single/double-digit basis points) loans and other fun weird contraptions, you have a lot more options to trade without trading.
I have no grand reveal here, but there’s probably an entire “dark dataset” regarding that activity that is missing from this conversation.
[+] [-] throwaway81523|4 years ago|reply
And so, according to how I was told, the accountant, after dropping off the document and walking out of the SEC building, would pull out his cell phone and call his buddy from the front steps with the relevant info. The buddy would then make trades on the now-"public" info that no one else yet knew, because it was still on a piece of paper in the SEC office that no one had yet looked at.
Could it really have been that easy? This would have been the 1980s or so, I think. I think they had cell phones then, but if not, they had pay phones.
[+] [-] siruncledrew|4 years ago|reply
The speed of communication outpaces the speed of government bureaucracy so it’s easy to take advantage of a technicality to make huge profits.
It’s like university exams when a friend in a morning class would take an exam and then tell others in the afternoon class about the questions and what to expect before taking the exam. The no guarantee the exams would be the say, but even if some questions overlap it makes a big difference.
In the case of university, I’m pretty sure this would be some kind of honor policy violation with repercussions if found out, and for Wall St it’s probably not even as tough as uni.
[+] [-] leoc|4 years ago|reply
[+] [-] agumonkey|4 years ago|reply
I can witness the same structure at my job. We all see stuff (not financial related) the public is not aware of. It would be easy to take advantage of that.
[+] [-] jkhdigital|4 years ago|reply
[+] [-] c7DJTLrn|4 years ago|reply
[+] [-] theshadowknows|4 years ago|reply
[+] [-] stonecharioteer|4 years ago|reply
[+] [-] AlbertCory|4 years ago|reply
Ladies and gentlemen of the jury: the defendant changed his 10b5-1 plan multiple times, and one of those times he profited hugely from it. The defendant's excuse that his advisor told him to do it and he needed the money for his daughter's college is just unpersuasive.
Anyone see why a prosecutor might be reluctant to bring such a case? It might well be true, but the jury may or may not stay awake long enough to agree. Best to concentrate scarce resources on cases you CAN win.
Note that I'm not saying insider trading is harmless; just that it's like illegal drugs: no policies will stamp it out entirely.
[+] [-] colordrops|4 years ago|reply
[+] [-] ryanlol|4 years ago|reply
[+] [-] ldjkfkdsjnv|4 years ago|reply
[+] [-] zz865|4 years ago|reply
Source? Sounds like someone just made it up.
This page said they went from 41 to 115 in 14 years, which is more like 12% a year. https://www.opensecrets.org/news/2020/04/majority-of-lawmake...
[+] [-] varelse|4 years ago|reply
Yet they never come up it's always Nancy Pelosi and that's just creatively bankrupt. So here are 36 more...
https://www.businessinsider.com/congress-stock-act-violation...
[+] [-] matheusmoreira|4 years ago|reply
Dehumanizing, isn't it? Working hard to contribute to society while these people accumulate 10, 100, 1000 times our yearly salaries in seconds by playing some market. The world we live in is so absurd, it's such a joke.
[+] [-] jahewson|4 years ago|reply
[+] [-] paulgb|4 years ago|reply
[+] [-] paganel|4 years ago|reply
Is there a way to "index-fund" Pelosi's investments? More generally, "index-funding" the investments made by politicians who are in a position of power would be a really interesting thing.
[+] [-] lisper|4 years ago|reply
[+] [-] orwin|4 years ago|reply
In any case, this is distasteful and gross. Every bill should have an estimated impact on publicly traded companies, and politicians with stocks should be forbidden to discuss/mediate the bill, and only vote on it.
[1]" https://www.forbes.com/sites/forbes-personal-shopper/2021/10...
[+] [-] burnished|4 years ago|reply
[+] [-] IAmGraydon|4 years ago|reply
[+] [-] sumedh|4 years ago|reply
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] RickJWagner|4 years ago|reply
[deleted]
[+] [-] fourstar|4 years ago|reply
[deleted]
[+] [-] NicoJuicy|4 years ago|reply
And because of their wealth, she could dedicate worked for the party for free for 20 years. Which got her to where she is now.
I would be more concerned with presidents who are known to spread/say things to try to influence the market.
[+] [-] SavantIdiot|4 years ago|reply
[+] [-] etaioinshrdlu|4 years ago|reply
Such a system seems possibly fairer and more efficient than what we have now.
[+] [-] tacostakohashi|4 years ago|reply
[+] [-] ProjectArcturis|4 years ago|reply
[+] [-] phyalow|4 years ago|reply
[+] [-] jcpham2|4 years ago|reply
[+] [-] EMM_386|4 years ago|reply
How do you think we got that miraculous bounce post-Covid?
The Federal Reserve had to step in with ~$8 trillion and start buying stocks.
Two Fed presidents had to step down recently due to their stock holdings.
They had to do this to save everyone's retirement accounts and the housing market.
And now we have inflation and this will get blamed on the President's policies. It has nothing to do with that, it's this massive injection of cash into the system. They may have gone a little overboard.
They are trying to slowly unwind this. Until then it's "party like it's the 1920s".
https://www.cnbc.com/2021/09/27/dallas-fed-president-kaplan-...
[+] [-] ojbyrne|4 years ago|reply
[+] [-] toss1|4 years ago|reply
How about: make all trades 100% transparent in real time, and nevermind the insider trading laws? If Jack Smith, the CFO of XYZ Corp, sells 300 shares at 11:04:00 AM, you can know about it by 11:04:01. Sure, Jack still has an advantage, but now his trade is ACTUALLY providing information to the market.
It is one thing for TipRanks to provide analysis two days after, another thing for them to be able to do it in almost real-time, or setup a Fast Follower fund...
Seems there's only good to be gained here, and the insiders won't have to worry about prosecution.
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] mihaic|4 years ago|reply
If society keeps seeing investing as an absolutely necessary thing for financial stability, we can't expect politicians and executives to not be corrupted.
[+] [-] darksaints|4 years ago|reply
[+] [-] jsemrau|4 years ago|reply
[+] [-] akrymski|4 years ago|reply
https://news.ycombinator.com/item?id=28692640
Does HN allow multiple submissions for the same URL now?
[+] [-] gverrilla|4 years ago|reply
[+] [-] paulpauper|4 years ago|reply
[+] [-] aynyc|4 years ago|reply