This Is How You Trade on the Inside
“Having knowledge others lack is a very, very good investment strategy.” — Insider
When I started tracking the big-money moves on Wall Street, I didn't know what rocks I'd be turning over... or what would be underneath them.
Sometimes you find things you don't want to see.
At first, I was disheartened to know that money is the primary motivation behind most of the people who lead this great country. That's why it's good to see our ethical lawmakers taking a stand against the corrupt insider trading taking place in Washington today.
In fact, big waves are forming in Washington.
There’s renewed pressure from the public and politicians on both sides of the aisle to place restrictions on lawmakers’ ability to trade individual stocks.
For once it feels like public opinion is shaping policy, the way democracy should work.
A recent poll by the Convention of States Action found that 76% of voters believe lawmakers and their spouses have an unfair advantage in the stock market.
This comes at a time when various members of Congress made opportunistic stock trades right before COVID-19 was publicly declared a pandemic in the U.S.
In fact, the controversy’s now called the “2020 congressional insider trading scandal.”
It’s a big deal.
And if you know where to look, you can make some seriously good returns following insider information.
If you don’t already know what happened, here’s the rundown...
I still remember the confusing rhetoric coming out of Washington at the beginning of 2020. At the time, my team and I were figuring out the best way to report on the coronavirus. Was it a pandemic or just an epidemic? Was it even safe to be in the office? We were all left in the dark.
On Jan. 24, the Senate Committees on Health and Foreign Relations held a closed-door meeting with senators about the virus and the coming physical and economic impact it was going to have on the U.S.
The public, however, wouldn’t know this information until March 11, when the World Health Organization (WHO) officially declared COVID-19 a global pandemic.
As for our leaders in Washington? They knew what was coming all along and made sure to rebalance their portfolios to profit from the coming catastrophe and stock market correction.
Not wasting a minute, Senator Kelly Loeffler, who’s married to Chairman of the New York Stock Exchange Jeffrey Sprecher, sold millions of dollars’ worth of stock. On the same day as the coronavirus briefing, Senator David Perdue sold more than $1 million of his holdings and bought DuPont, a leading manufacturer of personal protective equipment.
Most blatant were Senator Richard Burr’s transactions. As chair of the Senate Intelligence Committee, he had access to information only a small handful of people had. According to NPR, he attended a luncheon at the Capitol Hill Club on Feb. 27, where he delivered this message:
There’s one thing I can tell you about this: It is much more aggressive in its transmission than anything we have seen in recent history. It is probably more akin to the 1918 pandemic. Every company should be cognizant of that fact that you may have to alter your travel. You may have to look at your employees and judge whether the trip they’re making to Europe is essential or whether it can be done on video conference. There will be, I’m sure, times that communities... have a transmission rate where they say, “Let’s close schools for two weeks. Everybody stay home.”
Sure would have been helpful for the U.S. public to have that information. As for Burr, he and his wife sold more than $1 million worth of stock before the WHO’s global pandemic declaration.
Federal Reserve Vice Chair Richard Clarida sold a stock fund in February 2020 and then bought back into it right before the Fed announced safety-net programs to curb the economic fallout from the pandemic. After his trades surfaced last month, he stepped down, just weeks before he was set to retire at the end of January.
Eric Rosengren, president of the Boston Fed, and Robert Kaplan, president of the Dallas Fed, both resigned late last year after their stock dealings at the beginning of 2020 raised some eyebrows.
The list goes on...
Of course the ensuing Justice Department investigations didn’t do squat, and no one was held criminally accountable.
So there’s clearly a double standard for lawmakers when they get in trouble. And this has caused an outcry not only from the American public but from other members of Congress.
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The Call’s Coming From Inside the House
Now, Alexandria Ocasio-Cortez can be pretty polarizing, which is why her recent stance against congressional insider trading brings it to the forefront of people's minds.
In a recent interview with Yahoo Finance, she said at least 75 members of Congress held Johnson & Johnson, Pfizer, and Moderna stock the last two years, and continued...
Members of Congress have access to very sensitive security clearances... We have access to very detailed, tailored briefs. Our job is to try to anticipate and legislate for what we see is coming. And we should not have the ability to both have access to that information and be able to hold and trade individual stock.
This is popular opinion, and I think we can all get behind that. Other members of Congress don’t see it that way though.
Speaker of the House Nancy Pelosi has been outspoken against any new bill that bans congressional trading, telling reporters that “We’re in a free market economy. [Lawmakers] should be able to participate in that.”
And boy, have they been participating. Just look at the millions of dollars they spent on stock trades last year...
After feeling the pressure, Nancy Pelosi has since come around, saying “I just don’t buy into it, but if members want to do that, I’m OK with that.” She doesn’t care at this point anyway; she’s already made her millions.
But other Democrats think that's unfair and want their shot at profiting on the backs of the American people. Rep. Elaine Luria of Virginia sat down with Punchbowl News to deliver her opinion on the whole affair:
I think this whole concept is bullshit. Because I think that, why would you assume that members of Congress are going to be inherently bad or corrupt? We already have the STOCK Act that requires people to report stock trades. Why would you... automatically assume that they’re going to use their position for some nefarious means or to benefit themselves? So I’m very strongly opposed to any legislation like that.
It's because members of Congress violate the STOCK Act every year and manipulate laws in order to profit.
How do we know?
All we have to do is follow the money.
Trading on the Inside
If you know where to look, you can use these insider trades to your advantage. And I've got plenty of ways to do just that. I can show you who's buying what stock and how much they paid.
The only problem is sifting through the boring forms and cross-referencing them to find tradable patterns. But as Benjamin Franklin said, “An investment in knowledge always pays the best interest.”
So I'm excited to announce that today we're opening up access to Insider Stakeout, our newest investment advisory.
It's where I comb through the thousands of insider trades posted every day from corporate insiders, large financial institutions, and politicians. I’ve found this strategy to be extremely profitable while giving me confidence and peace of mind when pulling the trigger in such a volatile market.
So grab your stale coffee and gas station burrito and come join me as we go on a good old-fashioned stakeout.
Editor, Wealth Daily
After Alexander’s passion for economics and investing drew him to one of the largest financial publishers in the world, where he rubbed elbows with former Chicago Board Options Exchange floor traders, Wall Street hedge fund managers, and International Monetary Fund analysts, he decided to take up the pen and guide others through this new age of investing.
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