I Wonder if Caligula’s Horse Did This Well
US senators’ personal stock portfolios outperformed the market by an average of 12 per cent a year in the five years to 1998, according to a new study.
“The results clearly support the notion that members of the Senate trade with a substantial informational advantage over ordinary investors,” says the author of the report, Professor Alan Ziobrowski of the Robinson College of Business at Georgia State University.
Via Calpundit and Marginal Revolution. More:
The Ziobrowski study notes that the politicians’ timing of transactions is uncanny. Most stocks bought by senators had shown little movement before the purchase. But after the stock was bought, it outperformed the market by 28.6 per cent on average in the following calender year.
Returns on sell transactions are equally intriguing. Stocks sold by senators performed in line with the market the year following the sale.
Micha Ghertner at Cattalarchy sees a big opportunity for the whole country here. It just makes too much sense not to try it.
