How To Copy Trade Nancy Pelosi

Our Favorite Politician Investor: Nancy Pelosi

dub's $PELOSI portfolio, based on the trading activities of Nancy Pelosi, is the most popular and successful of our politician-based portfolios. Since its launch in September 2023, it has returned 105.2%, significantly outperforming the market return of 37.9% over the same period.

Why follow politician trades? Politicians may have access to information or insights that are not readily available to the public. For example, they may have insights into how upcoming legislation or regulations will impact specific industries and companies. In some cases, they might even anticipate global events through sensitive briefings or influence a company’s prospects through their legislative power.

The Pelosi portfolio aims to capitalize on these potential information advantages by purchasing stocks that Pelosi has bought.

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Portfolio Construction

We build the PELOSI portfolio using public financial disclosures required by the STOCK Act. These disclosures provide information about securities transactions made by members of Congress and other senior government officials.

While the portfolio is constructed from these disclosures, it isn’t an exact replica of Pelosi’s investments. Due to reporting and technical limitations, that’s not feasible. Instead, we apply techniques used by hedge funds to design a portfolio with the most potential to outperform the market.

Our strategy for creating politician portfolios focuses on two key factors:

1. Conviction: How strongly the politician believes a stock will outperform.

2. Information asymmetry: The likelihood that the politician has insights into the stock that are not widely known by other investors.

While our exact methods are proprietary, some concrete ways that we find stocks with high conviction and information asymmetry are:

1. Recency of trades. A recent stock purchase signals higher conviction than holding an existing position. We prioritize these fresh buys and minimize or eliminate exposure to stocks that have been sold, even if the politician didn’t sell their entire position.

2. Trade size. A $25 million trade shows greater confidence than a $5,000 one. Bigger trades likely indicate stronger belief in the stock’s growth prospects.

3. Niche stocks. Big names like AAPL are closely tracked by many investors. A politician buying AAPL may be acting on the public information as everyone else. However, when they purchase a small, under-the-radar stock, we believe there may be a unique reason it caught their attention.

While past performance does not guarantee future results, PELOSI’s excellent performance thus far has boosted our confidence in this methodology.

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Doesn’t the 45-day reporting delay hurt returns?

Politicians have 45 days to report their stock transactions, meaning that we find out about their trades well after they happen. While it would be ideal to know about trades instantly, the 45-day reporting lag does not render our strategy ineffective. Most politicians buy and hold for long periods of time. For example, our PELOSI portfolio has continuously held a position in NVDA since inception in September 2023, so a 45 day delay doesn’t affect overall performance much.

Moreover, politicians often report trades well before the 45-day limit since there is no benefit to delaying. For example, Pelosi’s most recent buy of NVDA occurred on July 25, 2024, and was reported on July 31, 2024.

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How do I invest?

Want to invest? Download the dub app to invest in this or any of our other portfolios. You can copy this portfolio with just a tap, and your investment will mirror this portfolio’s positions in real time.

We also have portfolios following other politicians - currently Tommy Tuberville of Alabama, Dan Crenshaw of Texas, Kevin Hern of Oklahoma, and Josh Gottheimer of New Jersey.

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What else do I need to know?

Past performance does not guarantee future results.

Investing is risky. This portfolio maintains continuous exposure to the stock market and is therefore susceptible to the inherent volatility and potential declines associated with equities.  Additionally, as this portfolio is based on the trading activities of Nancy Pelosi, it may adopt very risky positions or become highly concentrated in a few securities. Nancy Pelosi is not associated with dub and we have no special information about the rationale behind her trades. This portfolio has historically been much more volatile than the overall market and we expect it to continue to be volatile in the future.

All performance numbers in this article are as of 11-3-24.