Posted on 02/25/2014 10:23:24 AM PST by reaganaut1
Stock Picking Skills of SEC Employees Jawad M. Addoum, Alok Kumar, Kelvin Law
Abstract: We use a new data set obtained via a Freedom of Information Act request to investigate the trading strategies of the employees of the Securities and Exchange Commission (SEC). We find that a hedge portfolio that goes long on SEC employees’ buys and short on SEC employees’ sells earns positive and economically significant abnormal returns of (i) about 4% per year for all securities in general; and (ii) about 8.5% in U.S. common stocks in particular. The abnormal returns stem not from the buys but from the sale of stock ahead of a decline in stock prices. We find that at least some of these SEC employee trading profits are information based, as they tend to divest (i) in the run-up to SEC enforcement actions; and (ii) in the interim period between a corporate insider’s paper-based filing of the sale of restricted stock with the SEC and the appearance of the electronic record of such sale online on EDGAR. These results raise questions about potential rent seeking activities of the regulator’s employees.
(Excerpt) Read more at turnkeyanalyst.com ...
Martha Stewart?
Congress, who's members are exempt from insider trading laws.
They are allowed to trade on insider information and they can only beat other securities by 4% and stocks by 8.5%. Imagine if they had the ability to think intelligently and economic knowledge in addition to their insider information.
Compounded over time, those rates of return are outstanding.
Much like the “market crushing” returns members of Congress achieve.
Gee, what a remarkable coincidence.
You know, I think that a lot of Senators and Congressmen are amazingly good stock pickers - and real estate investors - too. I wonder why that is.
It’s finally happened. Every level of government is operating on a third world standard. The only thing left is a third world blood bath.
“It’s finally happened. Every level of government is operating on a third world standard. The only thing left is a third world blood bath.”
The sheep have been groomed. As long as smart phones are plentiful and working, malls are open and filled with cheap Chinese crap, and there is reality tv to be watched, the public will accept whatever the political class does.
Most Cheaters are just plain retarded.
It’s rare I see one that actually overcomes their demand for a change to rules of the game.
And when they do win it’s a rather pyrrhic victory, as they know they are abject failures and outright frauds.
Doesn’t matter what story they tell themselves and those who know, snicker at their convoluted and contrived idiocy.
Yeah, most of the time they are very conscious of their inferiority.
Hollow people are just to stupid play the numbers and are never serious contenders.
I have seen over the years some rather brilliant people delude themselves for their greatness and they were Ivy League grads.
Life is math. Every bit of it.
It’s all about probabilities and possibilities.
I work for probabilities and gamble on possibilities.
Probabilities win out with predictability and possibilities are an amusement....
WHY do we find this surprising? Well, some might... I don’t.
“Compounded over time, those rates of return are outstanding.
Much like the “market crushing” returns members of Congress achieve.”
I know, and it demonstrates the value of their insider information. A question for you. In addition to trading on insider information, how many of these SEC employees do you think sell their information to investors? I would think there are many who do.
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