(NewsNation) — Members of Congress oftentimes do better at beating the stock market than professional fund managers.
About 20% of them beat the S&P 500 last year compared to just 10% of fund managers who have beaten it over the past 10 years.
NewsNation’s Leland Vittert said the lawmakers make Warren Buffett look like a “rank amateur.”
Rep. Patrick Fallon, R-Texas, and Rep. Debbie Wasserman Schultz, D-Fla., are among the lawmakers with the largest profits, both beating the market by more than 50%.
Quiver Quantitative, a tool that helps everyday Americans keep up with the trends in trading, tracks trades conducted by lawmakers and breaks the process down so that consumers can better understand what is being reported.
James Kardatzke, the CEO and co-founder of Quiver Quantitative, joined “On Balance With Leland Vittert” to discuss how Americans can follow market moves made by Congress.
Kardatzke said his team has been scraping data from the congressional disclosure websites for the past three years now, working on writing a code that allows all the information and data to be reflected on his website but in a cleaner, more understandable presentation.
The only downside to using data systems from Congress is that the trades may not be as up-to-date as traders may prefer due to the 45-day delay in reporting movement allowed by the Stock Act.
“45 days is kind of a best-case scenario,” Kardatzke said. “The Stock Act requires that members of Congress disclose within 45 days of when they make the trade. Unfortunately, a lot of times, people just don’t follow that.”
He explained that there isn’t any strict enforcement of the Stock Act, which means lawmakers can report their moves whenever or even not at all.
“A lot of the people who are on the committee that’s supposed to be enforcing that are actually very active stock traders themselves, and often don’t follow the rules,” Kardatzke said.
But while there is a time gap between when trades happen and when they are reported, Kardatzke’s team found that if people act when the data is publicly available, they can often outperform in the market.