This evening I am very concerned about a 1% drop in the tech-heavy Nasdaq. Why this sudden concern? Because it could seriously damage Nancy Pelosi’s near-perfect investment record.
You may have read that a website has already nominated her as Wall Street Trader of the Year 2021. In fact, reading jacobinmag.com – which I’m told is a left-wing outfit – nonetheless, they have a great story about Ms. Pelosi and her business acumen.
Gordon Gekko of the New York Stock Exchange. The Omaha inspiration died. Long live the stock queen. Reportedly, she and husband Paul Pelosi have traded more than $50 million in assets over the past year with annual returns of 69% as of October, according to an estimate from Nancy Pelosi’s portfolio tracker.
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That’s higher than Buffett, George Soros, Cathy Wood and other star investors. Apparently, Pelosi’s portfolio outperformed the S&P 500 by 4.9 percent in 2019 and a significant gain of 14.3 percent in 2020, according to a foundation called FinePrint. Ms. Pelosi has become a cult figure among stock investors.
One cool move was buying hundreds of thousands of dollars in Roblox when the games company went public in March, according to jacobinmag.com. Many were skeptical about the value of a children’s video game, but the value of the stock has doubled since then.
In July, it invested at least $1 million in computer chip maker Nvidia, which is up 70% during the worldwide chip shortage.
A TikTok account called @quicktrades has garnered 70,000 likes for a post highlighting the “Queen of Investing”.
Pelosis revealed last month that it had bought millions in bullish buying options for stocks including Google, Salesforce and Micron Technology. Pelosis has reportedly reaped at least $5.6 million and up to $30.4 million in capital gains and dividends from its holdings in five large technology companies: Facebook, Google, Amazon, Apple and Microsoft.
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Now, frankly, I have no problem with Mrs. Pelosi getting rich. I like the fact that she has invested heavily in stocks and that she traded last year on Wall Street for this year. I always thought the high tide would lift all boats,
But I have a small problem with the businesses that Mrs. Pelosi runs that have serious regulatory issues pending before Congress. Some people think it has been going slow on regulatory issues around the tech giants.
There is always the issue of access, influence, confidential briefings, and non-public information. I know that in the executive branch you are allowed to trade stocks, but anything over a thousand dollars requires an ethical signature regarding potential conflicts of interest.
Similar rules are supposed to prevail in Congress, but I’m wondering about that. Pelosi has offended a number of her fellow leftists who believe that stock trading should be banned altogether. She does not agree.
Late last month, responding to the criticism, Pelosi said, “We are in a free market economy.”
Really, Mrs. Pelosi? Just say ma’am. Every policy it has supported is incompatible with the “free market economy”.
Not only do you advocate for government takeovers of energy, health care, banking, etc., but you have always enthusiastically supported big tax increases on those who “don’t pay their fair share.”
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On this last point, I was particularly interested in the report that you may have made up to $30 million in capital gains and dividends over the past several years. Nothing wrong with that, especially since George W. Bush lowered the tax rate on ceiling gains and dividends to 15% in 2003. But Miss Pelosi, wants to raise those investment rates to very high levels and even tax unrealized capital gains as a way to get taxed wealth. So, while you get your benefits, you are effectively preventing others from getting their after-tax benefits.
I remember meeting Mrs. Pelosi about 15 years ago when she was about to become Speaker of the House. It was a very interesting interview, I requested her, and I eventually asked her if she believed in the stock market and wealth creation, and she replied “Oh yeah, Larry, how do you think I got these?” She also lifted her hair and showed off a stunning set of diamond earrings.
Honestly, I kind of liked it. I think she was waiting for the question and had a great answer, and I was completely blinded by the dazzling diamond in front of me. Over the years, I’ve met her a couple more times, and they’re both fun enough. I have never had any personal hostility towards her.
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When I went to work in the Trump White House, before the cabinet room meeting began, I was greeted with a hug.
Of course, I do not agree with her political views. But then again, if Mrs. Pelosi returns to championing the free market and stock trading, the gap between her economic thinking and mine may be about to narrow. I wouldn’t bet on it, but hope springs from eternity.
Having said that, I would suggest to the speaker that you promote tax incentives that will create a great opportunity for all Americans to become wealthy and benefit from superior stock-picking skills. If you tax less, Mrs. Pelosi, like stocks or wealth or jobs and income, you’ll get a lot more of it. The non-rich can become rich.
And by the way, I would like to interview her again or even make another pleasant phone call. This is my countryside.
This article is excerpted from Larry Kudlow’s opening comment on January 10, 2022.