Though the Democrats lost control of the lower chamber of Congress, demand for information regarding Nancy Pelosi stocks remains hot. Not surprisingly, then, when news broke that the former House Speaker exited many positions – some of them at a loss – the move generated headlines. Though the viability of following “Congressional trades” incurs much debate, many retail investors believe they provide important trajectory-related clues.
According to the Financial Disclosure Reports database by the U.S. House of Representatives, Pelosi reported selling a total of 30,000 shares of Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) evenly across three transaction dates last year: Dec. 20, Dec. 21 and Dec. 28. Each transaction featured a value of between $500,001 and $1 million.
As well, the former Speaker sold a total of 2,000 shares of Netflix (NASDAQ:NFLX) from two separate transactions, one dated Dec. 29 and the other Dec. 30. In the first transaction, Pelosi sold at a loss of $66,385 while losing $63,535 in the second. Each transaction featured a value of between $250,001 and $500,000.
Moreover, Pelosi dumped 5,000 shares of Tesla (NASDAQ:TSLA) at an average share price of $140.38. The total loss came out to $511,197. As well, she targeted fellow blue-chip giant Disney (NYSE:DIS), exiting 10,000 shares at an average price of $87.58. This transaction resulted in a loss of $114,138.
Finally, regarding arguably the most notable of Nancy Pelosi stocks recently sold, the former Speaker sold a total of 10,000 shares of PayPal (NASDAQ:PYPL) on two transactions: one dated Dec. 21 and the other dated Dec. 28. In total, the transactions featured a value range between $500,002 and $1 million. Pelosi lost $424,313 in the first transaction and $429,938 in the second.
Nancy Pelosi Stocks Remain a Popular Trend
In many ways, the concept of following Nancy Pelosi stocks appears counterintuitive. Not always enjoying robust support from her own party, a survey in December 2022 revealed nearly half of Americans have an unfavorable view of the former House Speaker from California. Still, as a celebrated stock picker, she generates intense interest among retail investors.
As NPR reported in September 2021, “Young investors have a new strategy: watching financial disclosures of sitting members of Congress for stock tips.” Further, the news agency stated the following about the demand for so-called Nancy Pelosi stocks:
“Among a certain community of individual investors on TikTok, House Speaker Nancy Pelosi’s stock trading disclosures are a treasure trove. ‘Shouts out to Nancy Pelosi, the stock market’s biggest whale,’ said user “ceowatchlist.” Another said, ‘I’ve come to the conclusion that Nancy Pelosi is a psychic,’ while adding that she is the ‘queen of investing.’
‘She knew,’ declared Chris Josephs, analyzing a particular trade in Pelosi’s financial disclosures. ‘And you would have known if you had followed her portfolio.'”
In 2012, former President Barack Obama “…signed into law the STOCK Act, a bipartisan bill that prevents Members of Congress from trading stocks based on nonpublic information they gleaned on Capitol Hill,” according to the official White House statement.
Nevertheless, many retail investors continued to follow Nancy Pelosi stocks under the notion of following the smart money.
Congressional ‘Guidance’ of Debatable Merit
Inherently, value exists in gleaning information from the most powerful lawmakers in the U.S. government. Nevertheless, the merit of following implied guidance from members of Congress is a debated topic.
According to research published by the Journal of Public Economics, the authors of the study found “no evidence of superior investment performance whether [looking] in aggregate or at Senators specifically accused of informed trading.” The research covered the period between January 2012 and December 2020.
Still, that might not be the end for retail investors interested in Nancy Pelosi stocks. As Reuters reported in March 2020, public outcry rang out against U.S. senators who sold equity shares right before the coronavirus pandemic uprooted American society.
Therefore, this latest batch of data – this time for Nancy Pelosi stocks to sell – might rile market participants once again.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.