Congress Members' 50% Returns! Is Information Asymmetry Key to Trading?

Tiger_comments
01-09 15:16
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A group of "stock market gurus" has emerged in the US Capitol in recent years. According to a new report by Unusual Whales, in the recently concluded 2024 year, the stock portfolios of over 20 members of Congress outperformed the market.

Information asymmetry for insider trading? Congress members’ returns outperform $.SPX(.SPX)$ !

Last year, stocks held by Democratic members rose by 31%, while stocks held by Republican members increased by 26%, and the S&P 500 index rose by 24.9%.

The controversial Pelosi and her husband achieved a return of over 50%. Pelosi has opposed a ban on stock trading by members of Congress, stating that congress members should be able to participate in the "free market economy."

Stocks owned by Paul Pelosi, the husband of former House Speaker Nancy Pelosi, surged nearly 71% in 2024, consistently outperforming the market in recent years.

Pelosi's returns over the past decade reached 790%, far exceeding the S&P 500's 213%.

In 2024, nine congress members outperformed Pelosi, with Representative David Rouzer (a Republican from North Carolina) leading the way with a 149% return, mainly due to his purchase of Nvidia stock several years ago.

Is Trading on Information Asymmetry a Zero-Sum Game?

But Duan Yongping, often referred to as the "Warren Buffett of China," stated in a speech last week that information asymmetry has little impact on stock trading.

He argued that investing is not a zero-sum game, while information asymmetry is. Profiting from early access to information might even be unethical.

Apart from government officials and major market players, most investors do not have access to information asymmetry.

What do you think? Is information asymmetry important in stock trading?

Is it unethical to trade stocks using information asymmetry?

If you had access to such information, would you use it to profit?

What do you think is the most important factor in stock trading?

Leave your comments and also post to win tiger coins~

Do You Think Information Asymmetry Matters in Stock Trading?
Last year, stocks held by Democratic lawmakers rose by 31%, those held by Republican lawmakers rose by 26%, while the S&P 500 index rose by 24.9%. However, Duan Yongping, often referred to as the "Warren Buffett of China," stated in a speech last week that information asymmetry has little impact on stock trading. He argued that investing is not a zero-sum game, whereas exploiting information asymmetry is essentially a zero-sum game. ------------------ What do you think? Is information asymmetry important in stock trading? What do you believe is the most crucial factor in investing?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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Comments

  • highhand
    01-09 15:46
    highhand
    Win 15 Tiger-coins
    in school，this is called "play cheat". but if I got time machine that let me know which stock will go up, I will sell house and all in the stock. so when U look at Nancy all we can do is suck thumbs.
  • fir3tiger
    01-09 17:22
    fir3tiger
    Win 5 Tiger-coins
    so printing fiat is ethical?
  • Shyon
    01-09 17:42
    Shyon
    Win 30 Tiger-coins
    Information asymmetry can significantly impact stock trading by providing those with access to non-public information a clear advantage, as seen with members of Congress outperforming the market. However, while it can lead to higher returns, the ethical concerns make it a controversial issue.

    I believe trading on information asymmetry is unethical, as it creates an unfair market and harms regular investors without access to such information. Fairness and transparency are crucial for maintaining trust in the financial system, and insider trading undermines these principles.

    Honestly, if I had access to such information, I would tend to use it for personal gain 😜. However, I think the most important factor in stock trading is making informed decisions based on publicly available information and solid company research.
    @Tiger_comments @TigerStars @TigerGPT

    • icycrystalReplyShyon: 
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    • Shyon: 
      Come and join @rL @koolgal @icycrystal @b1uesky @Barcode @nomadic_m @ELI_59 @Fenger1188 @GoodLife99
    • TigerGPT: 

      Based on the news and articles I found, here are some viewpoints regarding information asymmetry in stock trading:

      A study showed that stocks from democracies tend to have improved liquidity and decreased information asymmetry compared to stocks from autocracies. This suggests that political regimes can impact stock liquidity and information transparency. Read more

        

      Asymmetric information, where one party has more or better information than another, can lead to market failures. It creates an unfair advantage for those with access to privileged information, causing a lack of transparency in the market. Read more

        

      Asymmetric information occurs when one party in a transaction possesses more information than the other, allowing them to take advantage of the less-informed party. This can lead to unethical behavior and harm the fairness of the market. Read more

        

      Considering these viewpoints, information asymmetry in stock trading is generally seen as a problem. It creates an unfair market and undermines transparency and trust. Trading on information asymmetry is viewed as unethical as it gives certain individuals an unfair advantage over regular investors who do not have access to such information.

      While it may be tempting to use non-public information for personal gain, it is important to prioritize fairness and transparency in stock trading. Making informed decisions based on publicly available information and conducting thorough company research are considered essential factors for successful trading.

      Please note that the information provided is for reference purposes only and does not constitute investment advice. Investing in stocks involves risks, and it is recommended to consult with a licensed financial advisor before making any investment decisions.

      Apologies for not being able to provide news specifically related to members of Congress outperforming the market. If you are interested, you can visit the provided links for more information on the topic.

  • Barcode
    01-09 17:03
    Barcode
    Win 10 Tiger-coins
    Understanding the history of patterns is paramount to understanding the market. Happy trading ahead! Cheers, BC 🍀🍀🍀
  • MHh
    01-09 19:14
    MHh
    Win 15 Tiger-coins
    Definitely information asymmetry is important in stock trading as it allows one to entry ahead of the surge and to sell before the stock crashes. I feel that this is somewhat similar to insider trading and is unethical and would resist profiting from such information. Information is the most important factor especially for significant swings in either direction, especially with government legislation which will have wide and big impact.
  • AI Mastero
    01-09 19:52
    AI Mastero
    Win 10 Tiger-coins
    Good question. There are totally 535 congress members and assuming all have similar information and big money, a few are only very successful(!). It still boils down to choosing the right stocks, get in the right time, seek the right advisors and taking the plunge.
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