'Conflicted Congress': Nancy Pelosi’s Portfolio Compared to Buffett

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Dec. 17 2021, Published 8:22 a.m. ET

In an explosive report titled “Conflicted Congress,” Business Insider noted that several lawmakers and congressional staffers are violating the Obama Era STOCK (The Stop Trading on Congressional Knowledge) Act. House Speaker Nancy Pelosi's stock trades (along with her husband Paul Pelosi) have been at the center of controversy. Several social media handles have been tracking her portfolio and compared her trades to that of legendary value investor Warren Buffett.

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The Business Insider report classifies Pelosi’s stock trades as borderline, which means that they merit more scrutiny. The report rated 13 members of Congress on the “danger list.”

Several lawmakers' stock trades should invite more scrutiny.

Incidentally, while Pelosi and her husband’s trades get oversized attention and Republicans have been attacking her for the traders, the Business Insider report finds that lawmakers' stock trades also need more scrutiny across the party lines.

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If anything, there are more Republicans on the “danger” and “borderline” lists and fewer of them on the “solid list,” which includes lawmakers with a clean record.

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Nancy Pelosi has defended her trades.

Pelosi has defended trading in individual stocks by lawmakers pointing to “free markets” and a “free-market economy.” Many lawmakers, including some Democrats like Alexandria Ocasio-Cortez, have objected to her comments.

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Some of the Twitter accounts tracking Pelosi’s portfolio have been banned. A popular handle has shifted to Gab. Incidentally, there has been a rise in social media channels that support conservative voices.

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How's Nancy Pelosi's portfolio tracked?

According to the law, Pelosi has to report her stock trades. Her portfolio includes stocks like Apple, Amazon, Nvidia, Alphabet, Microsoft, and Slack. A lot of her trades have been in options, which are a leveraged play on the underlying stock.

Going by the report, Pelosi has made some very profitable trades. For example, she exercised 40 call options to purchase 4,000 Alphabet (GOOG) shares at a strike price of 1,200, which was way below the prevailing stock price of GOOG. Unless it was deep in the money option, it should have been quite a profitable trade.

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She purchased 50 call options on Apple with a strike price of $100. Apple stock has since surged. She also bought options on Nvidia and the stock soared to a new record high. However, Nvidia has since corrected sharply from the peaks.

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Nancy Pelosi is getting compared to Buffett.

Many of the people against Pelosi have been comparing her with Buffett and Nostradamus. There's a pun intended here and many people think that she has been misusing her position to make these trades. Pelosi has maintained that she has been reporting all of her trades.

It can't be denied that most lawmakers, especially high-ranking ones like Pelosi, are privy to a lot of information that at least retail traders aren't aware of. There could also be instances of conflict of interest. For example, Pelosi has a lot of Big Tech companies in her portfolio that have been facing the heat from lawmakers due to their alleged monopolies.

Now, while lawmakers have been bipartisan in grilling tech executives, Pelosi might have a conflict of interest with her investments when taking on the Big Tech companies.

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