The Real Insiders: Members Of US House Of Representatives

May 29, 2011 11:40 am

We spotted this today:

“We find that stocks purchased by Members of the U.S. House of Representatives earn statistically significant positive abnormal returns. The returns outperform the market by 55 basis points per month (over 6% annually). As additional evidence of information advantage, the trade-weighted portfolio of purchased stocks significantly outperforms the equal-weighted portfolio indicating that Representatives invested much larger amounts in those stocks that performed best. The regression coefficients also suggest that House Members favor the common stocks of smaller growth companies with slightly above-average risk”

Here is the full report: Abnormal Returns from the Common Stock Investments of Members of the US House of Representatives

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