Welcome to issue #43 of The Davem Dish. Every week I share what actually works in investing based on my 20 years of wins, losses and expensive lessons. You’ll also get my thoughts on solopreneurship because the same principles apply — keep it simple, stay consistent and focus on what matters.
This is the fourth issue of Receipts & Reality, a recurring series where I take a finance-world claim and put it next to the reality. If you want to build an investing process that doesn't depend on anyone else's agenda, keep reading.
Back in 2012, President Obama stood at the White House surrounded by a bipartisan crowd of lawmakers and signed the Stop Trading on Congressional Knowledge Act into law. The STOCK Act, he said, makes it clear that if members of Congress use nonpublic information to gain an unfair advantage in the market, they’re breaking the law. Republicans and Democrats took turns congratulating each other, all the major news outlets covered the signing, and the message to the country was we heard your concerns about us getting rich in office, and we fixed it.
A year later, Congress quietly passed a bill scrapping the searchable online database the law had promised — the tool that would have let anyone match a lawmaker’s trades against their committee work. There was no recorded vote in either chamber. It passed by unanimous consent, citing security concerns from the federal employees whose disclosures would have been posted, and Obama signed it without ceremony.
Fast forward to the end of last month, a bill called the Stop Insider Trading (STOP) Act fell short because Republicans had added voter ID provisions onto it, knowing that every Democrat was going to oppose. Both parties walked out of the chamber blaming each other for protecting congressional insider trading.
The gap these Acts were supposed to close is still wide open and an entire investment community has been built around the idea that if people in Congress know things the rest of us don’t and are allowed to trade on it, why not just copy what they buy?
The Receipts
Back in March, I closed the Investor Deprogramming Series with a walk through forty years of insider trading scandals — hedge fund titans, celebrities, and even athletes. My argument was that even with insider trading, the market isn’t rigged against you, and I still believe that. But there was one group I left out, because the people in those stories mostly went to prison (for a time) and the people in this one write the laws.
Receipts & Reality only works when the claim being tested carries real weight, and this one has a big audience. Unusual Whales, the company best known for tracking congressional trades, says it has more than 5 million followers across social media. There are “Pelosi tracker” accounts that post every disclosure within minutes, copy-trading apps that will mirror a lawmaker’s trades in your own account automatically, and a pair of ETFs launched in 2023 that do it for you. NANC follows Democrats and its Republican twin (originally KRUZ, now trading as GOP) follows Republicans, and NANC alone held about $240 million as of this spring.
The pitch behind all of it is that Congress has an edge, and you can borrow it.
Part of that pitch is definitely true. The information these people have access to is unlike anything you or I will ever see. Members sit in closed-door briefings on pandemics, wars and national security threats. They decide which bills get a vote and when, and they hear about regulatory actions and government contracts long before the market does. People that work at publicly traded companies also have access to non-public information but they operate under trading windows, pre-clearance rules and compliance departments that bar them from acting on it. (Of course, there are instances of individuals breaking these rules anyway.) Members of Congress are technically barred from trading on non-public information too, but they operate on the honor system.
A paper published last year found that lawmakers who rise into congressional leadership trade about the same as their peers beforehand, then outperform those matched peers by up to 47 percentage points a year after they get the job. Seems a little fishy. All of the sudden, they are market experts?
And when you look at individual cases, it’s hard to argue that nobody is taking advantage, and it’s bipartisan.
Spencer Bachus (R-AL). During the 2008 financial crisis, while serving as one of the top Republicans overseeing the capital markets, Bachus was actively trading options on an ultrashort fund, a bet that profits when the market falls. A Wall Street Journal review noted that few other members traded options as actively. When 60 Minutes aired the story in 2011, it became one of the scandals that produced the STOCK Act in the first place. Bachus never faced charges.
Richard Burr (R-NC), Kelly Loeffler (R-GA), Jim Inhofe (R-OK) and Dianne Feinstein (D-CA). In early 2020, as senators received closed-door briefings on the coronavirus, all four sold significant amounts of stock (their own or a spouse’s) ahead of the crash. Burr was chairman of the Senate Intelligence Committee at the time and stepped down from that post after the FBI seized his phone. Loeffler, whose husband ran the company that owns the New York Stock Exchange, said third-party managers handled her accounts. Every investigation closed with no charges.
Tommy Tuberville (R-AL). In his first months as a senator in 2021, Tuberville disclosed roughly 130 stock and options trades weeks or months past the legal deadline, worth somewhere between $894,000 and $3.5 million. Those trades included selling put options on Alibaba, essentially a bullish bet that the stock wouldn’t fall, from a senator who built his brand attacking China. His office said he didn’t know about the trades because his advisors handled them. A few months later, he called proposals to ban lawmaker stock trading “ridiculous.”
Rob Bresnahan (R-PA). Bresnahan ran for Congress on a promise to ban congressional stock trading, then made almost 650 individual trades during his first year in office. Through the summer of 2025, only one other representative traded more. In the ten days between the release of the House text of Trump’s “One Big Beautiful Bill,” which cut nearly $1 trillion from Medicaid and phased out clean energy tax credits and its first floor vote, he made 81 trades worth at least $200,000, including selling Medicaid insurers and clean energy stocks while buying fossil fuel companies. Then he voted for the bill, which passed the House by a single vote. He told a town hall he had no dialogue with his financial advisors, then told a local radio station he meets with his financial adviser.
Marjorie Taylor Greene (R-GA) and Jared Moskowitz (D-FL). In April 2025, as stocks crashed after the Liberation Day tariff announcement, Greene bought shares on April 2, April 8 and April 9, the last of those being the morning Trump posted “THIS IS A GREAT TIME TO BUY!!!” a few hours before announcing the 90-day tariff pause. Moskowitz, a Democrat, bought into 20 companies on April 7. Both said outside advisors made the trades.
Nancy Pelosi (D-CA). No list would be complete without the most-watched trader in Congress, even though she doesn’t place the trades herself. Her husband Paul, a career investor, runs the household portfolio, and the STOCK Act requires her to disclose his trades as her own. In 2022, while she was Speaker of the House and publicly backing the CHIPS Act, a bill handing billions in subsidies to the chip industry, Paul bought more than $1 million in NVIDIA call options weeks before the vote. In 2024, he sold Visa shares about three months before the Justice Department sued the company for monopolizing debit cards, and he bought Palo Alto Networks calls after members of Congress, his wife included, were briefed on a “serious national threat.” Pelosi’s office maintains that she doesn’t own any stocks and has no involvement in her husband’s trades, which I don’t think anyone really finds believable.
And then there’s Chris Collins (R-NY), the only member in modern history to go to prison for insider trading. While standing on the White House lawn at the 2017 congressional picnic, Collins got an email that a drug trial had failed at a company where he sat on the board, and he immediately tipped off his son. He was sentenced to 26 months, but his tip came from a corporate board seat, not from Congress, and he was pardoned after serving a few months of it.
So yes, some of them cheat. The question for you as an investor is whether any of that edge helps you when you copy them.
The Reality
The tracker accounts would have you believe Congress is a reliable stock picking machine. Well, not exactly.
The first systematic study of congressional trading, led by Georgia State professor Alan Ziobrowski, looked at roughly 6,000 Senate trades from 1993 to 1998 and found senators beating the market by about 12% a year, more than double what corporate insiders managed. Stocks senators bought had been flat before the purchase and then outperformed by close to 30% over the following year. That’s the widely cited study, but it’s worth noting it covered the bull market of the late 90s, when portfolios leaning into tech could beat a broad index without any special information.
After the STOCK Act, the picture changed. A 2020 Dartmouth study looked at Senate trades from 2012 through early 2020 and found that the stocks senators bought slightly underperformed comparable stocks, with no evidence of an edge tied to their committee assignments. And in 2025, only about a third of trading members of Congress beat the S&P 500, according to Unusual Whales’ annual report.
Even the famous names aren’t as impressive as social media suggests. Pelosi’s portfolio gained about 20% in 2025, beating the index but ranking only 28th in Congress. Greene’s reported 2025 return was 33% on one tracker and under 12% on another, because lawmakers disclose trades in dollar ranges, which means every congressional return you see online is an estimate. And the ETFs built to copy Congress have mostly outperformed when they were overweight NVIDIA and Big Tech, which is a sector bet rather than insider access.
So does the average member of Congress have an edge? The evidence says probably not. But the edge was never spread evenly across 535 people. It’s concentrated in the seats with power. The freshman representative with an advisor and a good month is noise. The committee chair who decides when the chip subsidy bill gets a vote is a stronger signal. But that signal has a major flaw for anyone trying to copy it.
What You Can’t Copy
Members of Congress have up to 45 days to disclose a trade, and they only have to report it in broad dollar ranges like “$1,001 to 15,000” or “1 million to $5 million.” By the time a trade shows up on a tracker account, the vote has happened, the contract has been announced or the briefing has leaked, and the market has already priced it in. What’s left for you to copy is the position without the information that justified it.
If that sounds familiar, it’s the same problem with the hedge fund 13F filings people obsess over every quarter. Big money managers also get 45 days after each quarter ends to disclose their holdings, and by the time the “Buffett just bought” headlines hit, the position can be months old. In both cases, disclosure shows you what someone bought, but never why they bought it or when they plan to sell, and that last part is usually what separates a good trade from a bad one.
That’s the core problem with the whole “follow Congress” idea — any edge doesn’t survive disclosure. Whatever advantage a lawmaker had lived in the timing, and by the time you find out about the trade, the timing is gone.
Options make this even worse. If you knew a policy announcement, a vote or a lawsuit was coming in the next few weeks, the most profitable thing you could do is buy short-dated, out-of-the-money options. They’re generally cheap, and they can return ten or twenty times your money in days if you’re right. On the morning of the April 2025 tariff pause, there was a sudden spike in call options set to expire at the end of that same day, and one bet reportedly returned 2,100%. Nobody has been publicly identified as the buyer, and nothing ties it to a member of Congress, but that’s what an information edge looks like when it gets spent in the options market.
According to Unusual Whales, members traded more options in 2023 than in the previous two years combined, often while Congress was in session. Bachus’s bets against the market in 2008 and Tuberville’s Alibaba puts are both options trades, and because they’re disclosed in dollar ranges, you rarely know how much leverage was actually involved. Copying a lawmaker’s options trade 45 days later just doesn’t make any sense.
Who Referees the Referees
If the problem is this obvious, why hasn’t Congress fixed it? Well, why would they when there aren’t any penalties.
In addition to no sitting member ever being prosecuted, financial penalties for administrative filing mistakes are peanuts. The penalty for filing a trade late under the STOCK Act is a $200 fee for a first offense, and members can apply to their own ethics committees for a waiver. Oregon Rep. Val Hoyle, a Democrat, disclosed 217 of her husband’s trades late in 2025 and paid exactly that, $200. A Campaign Legal Center analysis found the House Ethics Committee publicly investigated only 8 of 60 potential STOCK Act violations since 2020 and effectively dismissed all of them.
The other part is who controls the agenda. If the edge is concentrated in leadership, then the people with the most to lose from a ban are the same people who decide whether a ban ever gets a vote. As Speaker in 2021, Pelosi dismissed the idea of a ban by arguing that the United States is a free market economy.
What Congress does instead is turn every scandal into a weapon against the other party. In May 2025, Democrats derailed a House hearing to accuse Greene of insider trading, and one of them held up a poster of her face. The poster didn’t have Moskowitz on it. Trump told a rally that Nancy Pelosi sold Visa the day before the lawsuit, which was false (it was about three months), and called for Republican attorneys general to investigate her. Each party seems fine with policing congressional trading as long as the person being policed sits on the other side of the aisle.
Why This Matters for You
I’ve made the case that none of the famous insider trading scandals actually affected you. Boesky, Rajaratnam and Cohen were trading against other institutions, not against your retirement account, and the same logic holds here. When a committee chairman buys a defense contractor before a contract announcement, the person on the other side of that trade is almost certainly a fund manager, not you buying a quality company at a discount and holding it for a few years.
The market isn’t rigged against an individual investor running a disciplined process. But there’s a small group of people in this country with access to market-moving information, the legal right to trade on the markets that information moves, and almost no consequences when they get caught, and they’re the same people who decide what the consequences are. You can’t fix that from your brokerage account, so the real question is what you do with the parts you can control.
First, don’t copy them. By the time a trade is disclosed, the edge (if there was one) is gone, and what you’re left with is usually a tech-heavy portfolio with a delay and, if you’re copying the options trades, leverage you may not understand. The “trade like Congress” accounts are selling you the story of an advantage you’ll never actually receive. Everything that makes congressional trading worth watching (the timing, the access, the leverage) is something you can’t replicate, and everything that builds wealth for you (a rules-based process and managing your emotions) is something nobody in Washington can take away.
Second, protect your attention. There will always be people in the market who play by different rules, and there will always be accounts that make money by keeping you angry about it. Often, they’re the same accounts selling you a way to copy those trades (Unusual Whales announced a new line of political-trading ETFs just this August), and a reader who is upset at Pelosi while buying NANC is acting on the same feeling twice — the belief that insiders always win and the urge to be one of them. Understanding how the game works at the top is useful. Turning that anger into trades, or into hours of scrolling disclosures, is the distraction. You can choose to get caught up in the drama, or you can choose to stick to what you can control.
The choice is yours.
Cheers,
Andrew
This is the fourth issue of Receipts & Reality — a recurring series where I take a finance-world claim and put it next to the actual numbers.
Issue 1 was a famous fund manager. Issue 2 was a famous forecaster. Issue 3 was a Nobel Prize winner. This one was about the people who write the rules and the industry built around copying them. What will the next receipts say? Make sure you’re subscribed for the first look.
The content provided are personal opinions and presented for educational purposes only, as of the date published or indicated. Davem Advisors LLC is not a bank, licensed securities dealer, broker or investment advisor. Displayed returns are unaudited. Nothing stated constitutes a recommendation or advice as to whether any investment is suitable for a particular investor. You alone are solely responsible for determining whether any investment, strategy or service is appropriate for your objectives. Past performance is no guarantee of future results. Inherent in any investment is the risk of loss.