November 15, 2004
How To Make A Killing Off the Stock Market: Become a U.S. Senator
A new study showing that the stock picks of Senators, as revealed in their financial disclosure forms, outperformed the market by a whopping 12 percent. Insider trading anyone? Although it's not clear whether any laws have been broken, Alan Ziobrowski, one of the study's authors says "there is cheating going on, at a 99 percent level of confidence."
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Legislators pass laws that benefit specific businesses which contribute to them through PACs and interest groups. Said legislators make certain investments with knowledge of passage of said laws before public is aware of passage. Legislators make a large profit before anyone else can. Seems pretty straightforward to me. Doesn't matter if its insider trading. Didn't you know your government can exempt itself from its own laws?
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You'd expect any decent stock investments to beat the market by about 12%. If you couldn't 'beat' the market then everyone would just buy index funds and be done with it.