(FreedomBeacon.com)- Young TikTok users have caught on to a tactic some investors have been using for nearly a decade – namely making stock picks by following the financial disclosures of sitting members of Congress.
Several companies provide software that allows investors to track stock purchases made by members of Congress – Capital Trade, Smart Insider, House Stock Watcher and Senate Stock Watcher to name a few. But it is rather surprising that young TikTokers have caught on as well.
Among one TikTok community of investors, Speaker of the House Nancy Pelosi’s stock trades are viewed as a veritable treasure trove. These investors are using Pelosi and her husband Paul as stalking horses to lead them to the perfect stock picks.
Chris Josephs, co-founder of a company called Iris, last year noticed that Pelosi’s trades were performing well. In the last year and a half, he has been making full use of the provisions of the 2012 STOCK Act which requires lawmakers to disclose all stock purchases and sales.
Now users on Joseph’s social investing platform get push notifications every time Pelosi’s disclosures are released. Personally, Joseph has been investing in whatever stocks Pelosi buys.
Nancy Pelosi has long maintained that the trades listed on her disclosures are not hers, but her husband’s, and that she has no knowledge or involvement in any transactions.
But Pelosi isn’t the only one worth watching. So far this year, lawmakers have filed over four thousand financial trading disclosures amounting to about $315 million in stocks and bonds bought or sold.
The creator of House Stock Watcher and Senate Stock Watcher, Tim Carambat, said that he has built up a significant following among those who want to use lawmakers for leads.
The trend to use Congress as a trading stalking horse is so widespread, it seems to be having an impact on the markets. Dinesh Hasija, assistant professor of strategic management at Georgia’s Augusta University, has been studying whether the market moves based on congressional disclosures. And according to his research, it looks like it does.
Hasija’s research leads him to conclude that investors believe that lawmakers may be privy to inside information. Which may explain why, whenever STOCK Act disclosures are released, there is a bump in the price of stocks listed on lawmakers’ disclosure forms.
Because as Chris Josephs told NPR, “If you can’t beat them, join them.”