Posted January 14, 2022
By Matt Insley
Organic Term Limits
This week, two of the youngest members of Congress – Sens. Jon Ossoff (D-GA) and Mark Kelly (D-AZ) – introduced a bill called the Ban Congressional Stock Trading Act.
As its name suggests, the bill “would require that all sitting members of Congress, their spouses and dependent children divest from certain investments or transfer them into a qualified blind trust within 120 days of the legislation being enacted,” says an article at The Hill.
Instead of outlining which securities would be banned should the bill pass, members of Congress would be limited to holding mutual funds, “diversification exchanges” (ETFs?) and bonds. Absolutely no single stocks!
“Members and their families will then be able to remove assets from the blind trust or dissolve it completely 180 days after the lawmaker departs office,” The Hill says. “[Those] who violate the law would be fined in the amount of their full congressional salary.”
If the bill passes – and let’s be honest, it probably won’t – it might be a natural deterrent to political careerism, leading to self-imposed term limits so many Americans have been clamoring for.
But one of the most recognizable Democrats in Congress has already gone on record with her opposition…
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Your Rundown for Friday, January 14, 2022...
The Pelosi Portfolio
“We’re a free market economy,” said Congresswoman Nancy Pelosi in December. “[Members of Congress] should be able to participate in that.”
Which might have something to do with Pelosi and her husband Paul’s enviable stock-trading track record. “Since 2020, she and her husband… traded over $50 million in assets, with annualized returns at 69% as of October,” reports Jacobin Magazine.
In fact, while many Americans were locked out of the workforce and filing for unemployment in 2020, “the Speaker of the House’s wealth grew by an estimated $16.7 million.”
Sorta makes you feel all warm and fuzzy inside, right? That aside, what’s to say you can’t make the Pelosi secret sauce work for you?
For that, we turn to Mr. Pelosi’s most recent trading disclosure as of December 2021 which reveals he bought $3.5 million worth of call options in large-cap stocks.
His most significant purchase was up to $1.5 million worth of call options in Salesforce (CRM) on Dec. 20. “Specifically, he purchased 130 call options with a strike price of $210 and an expiration date of January 20, 2023,” says Business Insider.
“The in-the-money call option purchase is a bet that shares of Salesforce will remain well above the $210 level by early 2023, and gives Pelosi the right to purchase 13,000 shares at that price, if the options are executed.”
Further purchases: 50 call options in Disney (DIS), 100 call options in Roblox (RBLX), 100 call options in Micron Technology (MU), and 10 call options in Alphabet (GOOG).
That’s right: options. Our own Alan Knuckman – who’s traded options for more than a quarter century – promises if you tweak the way you pick options in 2022, you might launch your portfolio into orbit.
“Not only will your trades have a greater probability of success right out of the gate,” Alan says, “you’ll be in prime position to regularly book the outsized returns options are known for.”
We’ll give out more of Alan’s advice on options next week…
Market Rundown for Friday, Jan. 14, 2022
S&P 500 futures are down 0.85% to 4,610.
Oil’s steady at $82.18 for a barrel of West Texas Intermediate.
Gold is up 0.25% to $1,826 per ounce.
And Bitcoin is down $230 to $42,360.
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We’re off Monday for Martin Luther King Jr. Day, but we’ll be back Wednesday. You all have an outstanding weekend!
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