For a time, many thought speculating in the market or trading stocks was reserved for the elite few, but this has been turned on its head recently. With the advent of cryptocurrency, Robinhood and even zero-trading-fee brokerage services, now the little guy has a shot.
Investors and traders just getting into the game may not have the experience of Wall Street pros, but the data and strategies are out there. Many look to the likes of Jim Cramer, a host at CNBC, or Wall Street analysts for tips to get ahead in the market, but there are still some untapped sources for returns on investment that most might overlook; namely, politicians.
The salary for a sitting member of Congress is $174,000 annually. While this isn’t anything to sneeze at, it begs the question of why there are so many millionaires in Congress. Investing in the stock market is sometimes the answer. And they seem to be pretty good at it.
About 51% of Congress members were millionaires in 2018. Comparatively, the United States had 17.4 millionaires, out of the total population of 243 million. That is roughly 7% of the population. It is hard to believe the difference is from salary alone, but considering the stock market is the greatest tool for wealth creation in the history of the world, things start to make sense.
Members of Congress are required by The STOCK Act to publicly file and disclose any financial transactions they make. According to Wikipedia:
The STOCK Act requires a one-year study of the growing political intelligence industry, and requires every Member of Congress to publicly file and disclose any financial transaction of stocks, bond, commodities futures, and other securities within 45 days on their websites, rather than once a year as they do now.
This bill was introduced and passed by Congress in early 2012. However, not everyone has followed the rules on this, and a few members of Congress failed to report up to $22 million worth of trades earlier this year, according to Forbes.
Here, 24/7 Wall St. has a look at the current Speaker of the House, Nancy Pelosi, and what trades are going on around her. Important disclaimer: these trades were executed by her spouse, Paul Pelosi. When reached for comment about some of these trades earlier this year, Nancy Pelosi’s spokesperson said, “The speaker has no involvement or prior knowledge of these transactions,” adding that Speaker Pelosi does not own any stock.
Some data is not available for some of these trades, but we do have the rough numbers. So here’s a look at Pelosi’s last six months of trading:
Nvidia Corp. (NASDAQ: NVDA): A block of 50 call options with a strike price of $400 and an expiration date in June 2022 were purchased on June 3. Important to note here is that there was a 4 for 1 stock split on July 20, which would make the new strike price $100, and the options would control 20,000 shares post-split as opposed to the original 5,000 shares. Nvidia last closed at $194.58, and the stock is up 14.7% from June 3 ($169.66 on a split-adjusted basis). The 52-week range is $115.67 to $208.75.
Apple Inc. (NASDAQ: AAPL): 50 call options with a $100 strike price and a June 2022 expiration date were purchased on May 21. Apple stock recently closed at $150.19 and is up 19.9% from May 21 ($125.24). The 52-week range is $103.10 to $151.68.
Alphabet Inc. (NASDAQ: GOOGL): Roughly $5 million worth of Alphabet was bought through exercising options on May 21. On June 18, 4,000 shares were purchased. Alphabet recently closed at $2,733.23, and the stock is up about 56% year to date, or 19.1% higher since May 21 ($2,294.13). It has a 52-week range of $1,402.15 to $2,767.25.
Amazon Inc. (NASDAQ: AMZN): A block of 20 call options with a strike price of $3,000 were purchased on May 21 and have an expiration date of June 2022. The closing price on May 21 was $3,203.08, and the stock is up about 1.2% since then. Amazon recently closed at $3,241.96, in a 52-week range of $2,871.00 to $3,773.08.
Microsoft Corp. (NASDAQ: MSFT): Call options were exercised and paid $1.95 million to buy 15,000 shares of Microsoft at a strike price of $130 on March 19. The very same day, Pelosi paid $1.4 million for 10,000 shares valued at $140 apiece. With a closing price of $229.82 on March 19, the stock is up about 27.5% since the purchase. Microsoft stock most recently closed at $293.08 and has a 52-week trading range of $196.25 to $294.82.
Roblox Corp. (NYSE: RBLX): 10,000 shares of Roblox were purchased on March 10, the day of the initial public offering. With a closing price of $69.50 on March 10, the stock is up about 13.2% since the purchase. Shares most recently closed at $78.68 and have a post-IPO range of $60.50 to $103.87.