[Analysis] Are politicians actually good traders?

Hello hello!

I did some analysis on 96 Congressmembers, their trades, and their returns.

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Summary

Politicians aren't particularly great investors, but they have significantly outperformed the market during the downturn of the last year (almost 70% of them beat the market).

Some of them have also made some pretty incredible trades:

• Mike Kelly (whose real name is George?) bought Cleveland Cliffs during the Covid crash for under $5 (currently almost $20)
• Nancy bought AAPL for under $4 (now over $150) and Visa for under $70 (now at $227).
• Sheldon Whitehouse bought NVDA at under $8 in 2016 (now over $200) and LRCX at $70 in 2016 (now over $500)
• Angus King bought UNH for $66 in 2014 (now almost $500)
• James Hill bought AAWW for $27.90 in 2019 (now over $100)
• David Trone bottom-ticking Morgan Stanley during the COVID crash for under $30 (now almost $100)

Politician data is hard to programmatically scrape and run calculations on, so use some caution when looking at the data (Nancy's info is good though as it was manually input).

If there are certain politicians that people are particularly interested in, I can try manually updating their trades and returns to make sure they are as accurate as possible and report back 🙂

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Data Source

The data for this analysis is all on politicianwatcher.com. The website has a leaderboard of 96 politicians and their returns and win rate. You can also click on their names to see their trades.

The data was scraped from their Periodic Transaction Reports that they are required to file every month they make a trade

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Notes about the data

Returns are all Time Weighted Returns and use the close price on the date the trade was made and the midpoint of the value range they report. So if the value range is $100k-$250k, $175k is used as the value and then the close price is used to determine the quantity.

Politician returns are notoriously hard to calculate because:

• they don't have to list the quantity or price of their trades, just a range for how much they bought (i.e. $100k-$250k).
• For the house specifically, some of their filings are scans of hand-filled-out documents like Pelosi's 2008 Annual Report. It's literally impossible to scrape these
• Politicians obviously don't have to report their holdings/trades from before they were politicians, so we can only work with the data in the filings we get
• IPOs, spin-offs, options trading, and investing through LLCs can also make it tough

So before rushing off to copy Gary Peters and his 99% all-time returns with 97% win-rate, I'd make sure to manually look into his filings.

HOWEVER, 'ol Nancy's 92% all-time returns are very accurate as I manually went through every individual and annual filing since 2008 and manually calculated it all. I plan to do the same for some of the more popular politicians in the future

If you don't see a politician you expected to see, there was probably some issue with the data. If you let me know who you want to see, I can look into why they aren't appearing.

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The fun stuff

The GOAT investor is former Senator Saxby Chambliss (also the GOAT name) whose only purchase is a 2014 purchase of AAPL when the stock was $20.

A couple of other investors killing it are:

• Gary Peters (Senator from Michigan), who is currently profitable on 41/46 (89%) purchases since 2015 and 29/30 (97%) trades that he has closed (bought and sold)
• Queen Nancy and the $50M in profits she has made trading stocks. She actually has underperformed the market quite a bit since she started reporting filings in 2008 (she is up 90% and SPY is 266%), but making $50M trading your own stocks (well her husband is trading them) is certainly something.

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Some of the best trades include:

• Mike Kelly (whose real name is George?) bought Cleveland Cliffs during the Covid crash for under $5 (currently almost $20)
• Nancy bought AAPL for under $4 (now over $150) and Visa for under $70 (now at $227).
• Sheldon Whitehouse bought NVDA at under $8 in 2016 (now over $200) and LRCX at $70 in 2016 (now over $500)
• Angus King bought UNH for $66 in 2014 (now almost $500)
• James Hill bought AAWW for $27.90 in 2019 (now over $100)
• David Trone bottom-ticking Morgan Stanley during the COVID crash for under $30 (now almost $100)

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Politicians have mostly sucked as bad as the rest of us over the last year:

• Only 18 of them have positive returns over the last year. Only 6 have returns over 10% and 0 have returns over 25% in the last year. The median 1-year returns are -6%.

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The last few months have been much better:

• 85 of them have positive returns in the last month with 22 having over 10% returns and 2 having over 25% returns
• The last three months are even better with 88 of them having positive returns, 29 having over 10% returns, and 3 having over 25% returns
• Nancy has made herself a cool $6M in the last month

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Only ~50% of the politicians have positive all-time returns, but this is a little skewed because of the last few years (most of the politician filings are from the last few years when the market has been no bueno). However, comparing the politicians to the market makes the politicians look better:

• During the short bull run of the last few months, the politicians are actually pretty in-line with the market. 43% have beaten the market over the last month and 47% have beaten it over the last quarter. However, they really shine when the market suffers as almost 70% have beaten the market over the last year

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Politicians have made $60M in profits by trading stocks with Nancy making up the vast majority of that ($50M). Only 5 others have profited at least $1M (John Hoeven, Sheldon Whitehouse, Michael McCaul, Gilbert Cisneros, and Claire McCaskill).

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Some Tables

High 1-Month Return	35%
Median 1-Month Return	4.8%
Low 1-Month Return	-4%
High 1-Month Profit	$6M
Median 1-Month Profit	$12.5K
Low 1-Month Profit	-$93k

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High 3-Month Return	48%
Median 3-Month Return	7%
Low 3-Month Return	-10%
High 3-Month Profit	$5M
Median 3-Month Profit	$19K
Low 3-Month Profit	-$300k

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High 1-Year Return	24%
Median 1-Year Return	-7%
Low 1-Year Return	-50%
High 1-Year Profit	$34K
Median 1-Year Profit	-$14K
Low 1-Year Profit	-$24k

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High 2-Year Return	60%
Median 2-Year Return	4.8%
Low 2-Year Return	-60%
High 2-Year Profit	$1.5M
Median 2-Year Profit	$3.6K
Low 2-Year Profit	-$17M

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High All-Time Return	650%
Median All-Time Return	-1.4%
Low All-Time Return	-60%
High All-Time Profit	$50M
Median All-Time Profit	$1.5K
Low All-Time Profit	-$620k

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Conclusion

I think politician trades are a little overrated. It's tough to accurately backtest their returns and they don't seem to be that great at trading. But they are fun nonetheless.

If there is a certain politician you want me to look more into, let me know :). I have a system where I can manually look through their filings and input their trades to get very accurate return data.