Truth In Humor
A few weeks ago, a friend of mine sent an email that he undoubtedly received as a foreward -- fortunately, he was kind enough to drop the FW: tag, and at least pretend it was something he put a little more thought in that one click of his mouse -- that went something like this:
Do you fancy working for a company that has a little more than 500 employees and has the following statistics?:
Can you guess which organization this is?
- 29 have been accused of spousal abuse
- 7 have been arrested for fraud
- 19 have been accused of writing bad checks
- 117 have directly or indirectly bankrupted at least 2 businesses
- 3 have done time for assault
- 71 cannot get a credit card due to bad credit
- 14 have been arrested on drug-related charges
- 8 have been arrested for shoplifting
- 21 are currently defendants in lawsuits
84 have been arrested for drunk driving in the last year
It's the 535 members of the United States Congress. The same group that cranks out hundreds of new laws each year designed to keep the rest of us in line.
Har har. Funny enough, I suppose. Ah, but the true punchline came home this morning while reading the New York Times.
Senators' Stock Beat the Market By 12 Percent
US senators' personal stock portfolios outperformed the market by an average of 12 per cent a year in the five years to 1998, according to a new study.
"The results clearly support the notion that members of the Senate trade with a substantial informational advantage over ordinary investors," says the author of the report, Professor Alan Ziobrowski of the Robinson College of Business at Georgia State University.
[. . .]
"The results suggest that senators knew when to buy their common stocks and when to sell."
First-time Senators did especially well, with their stocks outperforming by 20 per cent a year on average - a result that very few professional fund managers would be able to achieve.
[. . .]
A separate study in 2000, covering 66,465 US households from 1991 to 1996 showed that the average household's portfolio underperformed the market by 1.44 per cent a year, on average. Corporate insiders (defined as senior executives) usually outperform by about 5 per cent.
The Ziobrowski study notes that the politicians' timing of transactions is uncanny. Most stocks bought by senators had shown little movement before the purchase. But after the stock was bought, it outperformed the market by 28.6 per cent on average in the following calender year.
Returns on sell transactions are equally intriguing. Stocks sold by senators performed in line with the market the year following the sale.
When adjusted by the size of stocks, the total portfolio returns outperformed by 12 per cent a year on average. The study used a total market index as the benchmark for comparison.
Har Har Har.... ah, the sweet sting of humor.
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