Stock God Pelosi

Teh first part of this article discusses "Stock God" Cathy Wood's troubles, then moves on to Pelosi. Nothing new here, but funny to see it at the top of the finance section today.

iFeng: 议员“股神”佩洛西的财富密码

02 The rise of Congressman Pelosi

Opposite to Sister Mutou, is another invisible female stock god Pelosi’s muffled way of making money (Note: In the United States, official personnel can invest in stocks or buy funds, but they need to declare and disclose, so as to be open and transparent).

First look at who Pelosi is - Pelosi, 82 years old this year, the third in line to the US President, has served as Speaker of the House of Representatives for 19 years, is the first female Speaker of the House of Representatives in US history, also known as The most powerful woman in American politics.

The matter of U.S. imperial policy is beyond the scope of our discussion, and we only do some learning about its income. As speaker, Pelosi's annual salary is about $220,000, which belongs to the standard middle-to-high income group, but this is nothing compared to her income from stock trading.

In fact, in July last year, Yahoo Finance, a well-known US financial media, published an article "How rich is Pelosi? ” article, pointing out that she is the highest-paid person in the US Congress, and that most of her income comes from stock trading (through the operation of her husband’s company).

Back in 2018, Pelosi's fortune had reached $115 million, ranking 7th in Congress. Since then, her wealth is still accelerating, let's review some of her operations. For example, in February 2020, buy Google's call (call option). Even at the highest point of the stock price at $1,532 at the time, it has basically doubled its earnings so far. The point is that Pelosi's operations are basically buying calls, which is 100 times leverage (1 call option = 100 shares), so you can imagine how much she has taken.

Let's take a look at several waves of operations in 21 years

On March 19, 2021, Pelosi bought 25,000 shares of Microsoft twice through the Microsoft call options she bought earlier, and the strike prices were $130 (15,000 shares) and $140 (10,000 shares). Even if she sold it immediately at $230 that day, Pelosi's gain would be 100*15,000+90*10,000=$2.4 million. What's more, Microsoft's stock price rose all the way last year, reaching as high as $349.

Regarding Pelosi's deal with Microsoft, the very "magic" thing is that after she bought it, Microsoft won a defense order contract worth $22 billion, and in April 21st, it acquired Nuance for $19.7 billion, which continued to stimulate The stock price rose, so the outside world continued to question it was insider trading. There are many other things like this, but of course Pelosi denies it. The question is, do you believe it?

In addition to Microsoft, Pelosi has also bought call options on the first shares of the Metaverse Roblox, Google, Tesla, Nvidia, Apple, etc. in 21 years, each of which is almost a classic case. If I had to say, the book "The Smart Investor" should have been written by her.

After so many god-level operations, we naturally have to pay attention to her every move, and I believe there will be a lot of wealth codes in it. Looking at the recently disclosed transaction, Pelosi bought several million dollars worth of call options late last year.

It can be seen that Pelosi’s operations are generally far calls (call options with a longer expiration time) to buy large-cap technology stocks. The expiration times are September this year and January next year. Buyers are Google ($50-$1 million), Salesforce ($1.5-$3.5 million, in two installments), Disney ($1-2.5 million), etc.

Regarding this purchase list, the giant Google needless to say, the past six quarters of earnings have all exceeded expectations, advertising revenue has grown steadily, and cloud computing has continued to develop. And last year, Apple's privacy policy had a huge negative impact on Meta and Snap, but Google was immune to it or even benefited. The momentum for continued market value expansion in the future is still sufficient.

The first one that is more puzzling is Salesforce (which is basically Pelosi’s largest purchase this time), because according to the research reports of some leading investment banks (such as UBS), the future growth rate of the software industry in the United States may slow down, while The valuation level of the sector is very high, which is also the core reason for the cliff-like decline of the SaaS sector in the past two months. In fact, another giant Adobe released its financial report in mid-December, and management has fallen by about 20% despite the poor guidance for next year. So can Salesforce buck the trend? Perhaps Pelosi has some unique information.

Also a little confusing is Disney. Although the operation of this old-fashioned empire will not be bad, judging from the financial report of the last quarter, the growth of the streaming media business is not optimistic, and the driving force of the stock price is relatively weak. And the streaming media track is naturally rolling. There is the old brother Netflix in the past, and giants such as Amazon and Apple are all pouring money into this track (tens of billions of dollars every year), and even the rookies mentioned above. Roku is also working on its own. Does Pelosi have any unique insights on this?

In addition to the giants, it can be seen that Pelosi has once again added Roblox, the first share of the metaverse, and newly opened Micron. Regarding these two companies, the prospects are still relatively optimistic, and we will continue to track the fundamentals. Regarding the question of whether this assignment is worth copying, you can refer to Pelosi’s return in the past year-according to Open Secrets statistics, Pelosi’s 21-year return is as high as 56%, significantly outperforming the S&P and Warren Buffett. , as well as the top hedge funds on Wall Street.

Well, let's talk about Pelosi here first, and finally end with one sentence.

"I choose not to own any stock so I can be fair to policymaking." - Nancy Pelosi