If You Can’t Beat ‘Em, Join ‘Em!

Larry Jacobson, Ed.D on Jul 22, 2024
 
On July 24th the ETHICS (The Ending Trading and Holdings in Congress Stocks) Act bill is expected to head to Homeland Security and the Government Affairs Committee for markups. This act is designed to crack down on the insider stock trading by members of Congress by doing the following:
  • Require members of Congress and their spouses and children to divest from their assets as of 2027.
  • Ban lawmakers from trading stocks for 90 days after the bill becomes law.
  • Impose the following penalties: a lawmaker’s monthly salary or 10% of the value of the asset, whichever is bigger if the law is violated and finally,
  • The act will also require divestment of assets even if put in a blind trust
  • This act is intended to supersede the STOCK (Stop Trading on Congressional Knowledge) Act of 2012, which currently requires Congressional members and their spouses to disclose trades over $1,000 within 45 days of purchase. Sadly, the penalty for violating such act only results in a $200 fine, which is not much of a deterrent.

Who knows what the outcome will be for this newly proposed bill, regardless, there are a couple of ways that you can also benefit from such trading information:

Recently, Usual Whales, an options order flow platform that helps track and act on institutional options trading activity has created two new ETFs that divide both party lines:

  1. Ticker NANC (Unusual Whales Subversive Democratic Trading) ETF
 
   2. Ticker KRUZ (Unusual Whales Subversive Republican Trading) ETF                                                                                       
 
They were created to build Portfolios based upon 300-600 investments disclosed by lawmakers and their families.
 
Usual Whale’s goal: to let people follow Congressional investments without having to sift through disclosures, while allowing others to benefit alongside them.
 
Finally, there is also an app called Auto Pilot, https://bit.ly/3zDW42y  which allows users to follow the top holdings of others’ portfolios such as Warren Buffett, Bill Ackerman, Paul Pelosi (Nancy Pelosi’s husband),  and other Congressional representatives.     
 
Utilizing the Trading Academy’s Core Strategy may help you better time these opportunities within your own portfolios. Like the Auto Pilot’s motto, “If you can’t beat ‘em, join ‘em.”