AOC claimed the insider trading is an open secret in Congress because:

* Congress members don't get paid much and like money.

* They are often old with healthcare issues. Their govt health plans are not great.

* They maintain two residences, one in DC and one in their home state. AOC rents an apartment in NYC that she never lives in and one in DC. This is a huge expense.

Closing this privilege might have other unintended effects... Only the very wealthy can afford to be in Congress.

They are complaining because they have to live where they work? What a hardship that no one else faces…

These are different problems, right?

> Congress members don't get paid much and like money.

They're paid $174,000 per year. [1] That's 3–4x the median US salary. I know it's not, like, lucrative, but if they wanted a lucrative salary they should have gotten a different job!

> They are often old with healthcare issues. Their govt health plans are not great.

Fix the government health plan. Or better yet, make it a public health plan available to everyone!

> They maintain two residences, one in DC and one in their home state. AOC rents an apartment in NYC that she never lives in and one in DC. This is a huge expense.

There are only 541 of these people (plus aides, etc). The government should have an official building for sitting Congresspeople to live in. Like a dorm, but for electeds!

[1] https://en.wikipedia.org/wiki/Salaries_of_members_of_the_Uni...

> They're paid $174,000 per year. [1] That's 3–4x the median US salary. I know it's not, like, lucrative, but if they wanted a lucrative salary they should have gotten a different job!

They could also vote themselves a higher salary, but I guess they realize that would be very unpopular with the general public who, for the most part, get paid far less than politicians. The complaint essentially boils down to spoiled brats whining about wanting to be part of the economic elite. For most of the public, this complaint falls on deaf ears, particularly when it's coming from people who already have a great deal of power and are insulated from the realities of life experienced by most of the people they're ostensibly meant to be representing.

"Boo hoo, I already earn 3-4x more than most people in my state and belong to an elite class of policy makers but I'm so impoverished and oppressed because the billionaires have bigger houses than me :("

Honestly more insufferable than Marie Antoinette.

Not when you need to have two residences, one of which in a location well above the average cost of living (DC).

Yes, I covered that. The government should provide housing in DC for Congresspeople and aides. We don’t need to be okay with insider trading.

"We should allow members of Congress to trade stocks using insider information so that poor people can afford to run for Congress" (which costs a million bucks, give or take) is certainly an interesting take.

That seems like a good argument for raising their salaries. Increasing the candidate pool beyond the independently wealthy is good, but letting them do a little crime is a bad way of increasing the candidate pool.

I think there is a delay on stock disclosures, like they only have to disclose purchase/sale once a quarter or something which makes it hard to profitably copy their trading.

But it could be backtested, which I think is the point - "is the supposed insider trading actually profitable for Congress members?"

You can see the backtest performance of some of some strategies built around congressional trading data here: https://www.quiverquant.com/strategies/

The holdings and advanced metrics are behind a paywall (apologies in advance).

I think I recall someone doing that analysis and posting about it on HN, but I don't remember what the conclusion was.

There's been articles which did the math before. Several - really every few years someone takes another pass at it.

They do well. Generally, retiring their tenure wealthier than their congressional salary would allow at a 100% savings rate.

I think the question is really whether they’re trading, say, outperform an index fund of the S&P 500?

> Second, we conduct the first analysis of members’ portfolio holdings, showing that between 2004 and 2008 the average member of Congress would have earned higher returns in a passive index fund.

https://www.jstor.org/stable/10.1017/s0022381613000194

> For all trades reported electronically and on paper, the buys and sells have the same pattern; they underperform slightly for the first few months and then outperform the market after 150 days by less than 1 percent, which is not statistically significant. Otherwise, the returns of the buys and sells appear to be relatively random.

> The results show that neither Democrat nor Republican senators are especially skilled at picking stocks to buy.

https://home.dartmouth.edu/news/2020/04/us-senators-stock-pi...

Honestly a 100% savings rate isn't terribly hard when all your campaign costs are covered, your travel is covered, your office expenses are covered, and lobbyists or donors pick up the tab on a lot of miscellaneous things. Even assuming zero fraud/abuse/illegality, given that you typically already need to be at least moderately successful financially to run for federal office it's not crazy to think that most members of Congress probably already have paid off cars, paid off or close to paid off homes, etc. Not to mention spouses that probably also have very good paying jobs given the connections you're likely to already have by the time you're running.

NANC and KRUZ are the ticker symbols (I wish I was joking)

Interesting that NANC is doing so much better than KRUZ. Any ideas why?

> Interesting that NANC is doing so much better than KRUZ. Any ideas why?

Presumably because they're on different committees. Or have different friends.

Just like existing law, pending legislation is too vast for any one person to know it all.

Nancy Pelosi holds a ton of Microsoft stock, I believe up to $25M last time I checked.

I haven't checked the NANC holdings, but her Microsoft position has definitely been carrying our Nancy Pelosi Strategy on Quiver.

Pretty small out-of-sample window, but we built a trading strategy on top of congressional trading data and it's done well since we launched it last year.

You can see the backtest performance here, but the holdings and advanced metrics are behind a paywall (apologies in advance): https://www.quiverquant.com/strategies/

As others have pointed out, there is a delay between when the trades are made and when they are disclosed and our strategy is able to act on them.

However, this is somewhat countered by the fact that politicians tend to hold stocks for long periods of time.

There are definitely some examples of politicians trading a stock right before a massive market moving event, but I think they are generally looking at a longer time horizon when they are investing.

We should not expect it to beat the market, since legislators themselves don't beat the market:

https://www.sciencedirect.com/science/article/abs/pii/S00472...

> We find no evidence of superior investment performance whether we look in aggregate or at Senators specifically accused of informed trading. Over a six-month horizon, stocks bought by House Members underperform on average by 26 basis points, while stocks sold underperform by 11 basis points.