The Capitalist Investor - Episode 110

How can we sustain the right to a free market but also prevent politicians from cashing in on insider information? How many days should people with Covid-19 quarantine? Is it two weeks, ten days or five? This week’s episode is all about spice; primed with a heated debate on Congress members taking stake in stock and a segment on how the CDC’s messaging schemes are up in flames. In Episode #110 of “The Capitalist Investor,” Mark, Derek and Luke are all in the hot seats as they tackle contentious topics with a little kick at the end.

Outline of this Episode:

  • [2:20] What Democrats and Republicans both have in common
  • [16:25] The CDC’s messaging is only as good as its data
  • [24:40] A ‘Red Hot’ topic we love

Congress members always know something we don’t know –– some of them profit off of that

Politicians are elected to serve people, with that comes a lot of responsibility and an abundance of access to non-public information. If you were given a scoop that a popular politician was about to introduce a bill that has the potential to shake or influence the market –– you would be able to act before it became public information and before all others could. That is simple insider trading and it is illegal. But some politicians do this –– or rather tell their spouses or families to.

The STOCK Act from 2012 states that insider trading laws apply to Congress members and their families and all stock trades must be disclosed within 45 days. The law does not prohibit members from trading stocks but only requires them to be transparent about when they do so and prohibits them from using their positions to act on making stock picks, including their families. But still many –– on both sides, Republican or Democrat –– disregard the act. According to several media outlets, in 2021 alone, at least 50 Congress members have violated the STOCK Act.

Year after year, politicians and their families have been able to finish extremely high in the market when compared to their average constituents. While Nancy Pelosi doesn’t trade any stocks, the Speaker of the House’s husband has a portfolio that has dramatically surpassed the S&P 500 over the last few years. The California couple accrued more than 30 million dollars alone just from Big Tech stocks. Pelosi is just one of the most commonly known politicians to be banking in on the market –– but the list goes on.

Why aren’t politicians required to announce trades before so, or within the same day? If over 50 politicians failed to report their trades after an entire 45 days, would they have if they weren’t caught? Should Congress members or their families even be allowed to trade? Is anyone actually going to do anything about this? It’s tricky, it requires powerful people to fight other powerful people, but it can be done.

How could lawmakers ever pass a law against themselves? It won’t be easy

We believe in a fair market where everyone has the chance to participate. We’re aware that even politicians need retirement funds or need access to investments. There needs to be somewhere in the middle where they can partake in that but not make large profits on non-public information and continue to outperform the market every year.

The majority of the country already believes that Congress members should not be able to trade stocks –– at all. The risk of using insider information is just too large and too difficult to hold politicians accountable for; it’s too easy for them to do.

But the issue is: this isn’t a one party affair where all members of one side agree. This is a nonpartisan activity where both Democrats and Republicans are the culprits. Who will hold those in power accountable when the politics is so blurred?

In order to prevent members of Congress and their families from trading stocks, powerful people need to fight other powerful people and it may mean that they have to fight alongside people they wouldn’t prefer to fight next to.

According to the New York Post, this past month, two Democratic senators from Georgia and Arizona introduced a bill to ban all members and their families from trading stocks while serving in office. Similarly, a Republican senator from Missouri announced his support for a ban and a future proposal on the way. The ban bills are coming from both sides of the table, but can they unite to hold their respective parties accountable? Until then, the free market isn’t an equal playing field and everyone should be given the fair chance.

Interested in learning more and following along with politicians’ stock trades? This is the resource we referenced in this week’s episode here.

The CDC is mixing up their messaging and its costing their credibility

“Quarantine for ten days. Wait, quarantine for five. Wear a mask, but not that mask. Get vaccinated to stop the spread. But also, being vaccinated won’t prevent you from getting Covid-19.” These are just a few of the mixed messages that the CDC has relayed to the public since the pandemic began.

The CDC’s messaging and success is only as good as what they put into them. What does the data for a ten day quarantine look like? What’s the difference now with five? If the CDC’s data is bad or incomprehensible, then their messaging will be erred too.

The CDC’s mixed messaging will lead to a horrible relationship between the many people they have deterred and how they believe in government agencies. How many more lives will it cost us down the road in the future if the CDC can’t retain credibility? Time has been an asset during this entire pandemic and much of it was lost from subliminal messaging.

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Keep Listening to The Capitalist Investor:
Episode 15:
Spending Strategies in a Bear Market, Ep #15
Episode 31:
Handicapping the 2020 Election, Ep #31
Episode 47:
11 Investments in Your Home That Pay Off, Ep #47
Episode 63:
Jeff Bezos and Amazon: Past, Present, and Future Ep #63
Episode 79:
7 Ways Biden Plans to Tax American Families (Part II), Ep #79
Episode 95:
5 Beaten Down Stocks to Buy on the Dip, Ep #95
Episode 111:
Special Episode – Talking Energy with Daniel Turner, Ep. #111
Episode 127:
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