Copying the trades of renowned investors is an increasingly popular approach to investing. Michael Burry of ‘The Big Short’ fame, for instance, secured a 74.24% return in 2024.
Senators and congresspeople tend to make much greater returns from their investments in the stock market as well. The practice itself is controversial — lawmakers are privy to potentially market-moving information that the public is not. By the time that crucial information becomes public, the table has already been tilted.
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So, what if you could find a stock that has the best of both worlds — a purchase from Burry as well as a D.C. insider?
While former Speaker of the House Nancy Pelosi is the most famous (or notorious) congressional stock trader, she isn’t always the most successful. In several stretches, Josh Gottheimer, the Representative of New Jersey’s 5th congressional district has managed to secure greater returns. Gottheimer is one of the most prolific — and one of the most successful stock traders on Capitol Hill.
Finbold’s congressional trading radar recently picked up a periodic transaction report from the Clerk of the House of Representatives dated February 10. However, this time around, one of the Congressman’s transactions was quite a suspicious trade. In late January, he invested in Michael Burry’s largest stock holding — Chinese e-commerce and tech giant Alibaba (NYSE: BABA).
Gottheimer goes long on Michael Burry’s biggest stock bet
At press time, BABA stock was trading at $118.97 — having marked an impressive 40.31% return on the year-to-date (YTD) chart.
Gottheimer invested in BABA stock twice — first, on January 16, then once again on January 31. Each transaction was valued at between $1,001 to $15,000. On the day of the Representative’s first purchase, Michael Burry’s favorite stock closed at $82.43 — and had risen to $98.84 by the time of his second purchase. That amounts to a 44.32% and 20.36% surge, respectively.
With the 32.34% return that Gottheimer has already made, the Congressman could be up anywhere from $645 to $9,702, depending on where in the $2,002 to $30,000 range the exact value of his two trades lays.
A couple of things make this a suspicious trade. For one, it’s odd enough that a sitting Representative is investing in one of the biggest and most important companies of the United States’ most significant rival.
But it doesn’t end there — Gottheimer is also a member of the House Intelligence Committee. In all likelihood, the congressman possesses a significant informational edge in general, and even more so in particular when it comes to the exact dynamics of the nascent trade war between the United States and China.
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