Eric T. Singer

Trade the Congressional Effect (eBook, ePUB)

How To Profit from Congress's Impact on the Stock Market

• Format: ePub

Produktbeschreibung

An innovative investment approach that takes the actions of the U.S. Congress into consideration Historical research indicates that, more often than not, when Congress is in session there is a negative effect on equities markets (the "Congressional Effect") due possibly to investor uncertainty surrounding government action or inaction as well as the unintended consequences of Congressional legislative initiatives on the stock market. Author Eric Singer, a financial professional with over twenty-five years of experience, is an expert on this phenomenon, and with this new book he shares his extensive insights with you. Trade the Congressional Effect skillfully details how you can profit from Congress's impact on the stock market. Along the way, it puts this approach in perspective and gives you all the tools you'll need to profitably incorporate it into your investing endeavors. Singer walks you through the process of trading the Congressional Effect and provides practical guidance regarding the possible pitfalls and opportunities you'll face each step of the way. * Addresses why it is better to invest while Congress isn't in session * Reveals exactly what the Congressional Effect encompasses and why it occurs * Written by Eric Singer, one of the first people to publicly document the general effect of Congress on daily stock prices Supported by over forty-five years of real world data, the Congressional Effect has proven profitable to those who know how to use it. This timely guide will show you exactly what it takes to make this phenomenon work for you.

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Produktdetails

• Verlag: John Wiley & Sons
• Seitenzahl: 224
• Erscheinungstermin: 7. September 2012
• Englisch
• ISBN-13: 9781118417096
• Artikelnr.: 38265652

Autorenporträt

ERIC T. SINGER manages the Congressional Effect Fund, traded under the symbol CEFFX (CEFIX for institutional investors), a public mutual fund launched in 2008 through his registered investment advisor, Congressional Effect Management, LLC (www.congressionaleffect.com). He was the first to document the general effect of Congress on daily stock prices in an article published in Barron's in 1992. His opinion pieces have appeared in Investor's Business Daily as well as Forbes, the American Spectator, American Thinker, Townhall, Seeking Alpha, and Newsmax, and he has been featured on national TV and radio, including Fox Business News and Bloomberg TV.

Inhaltsangabe

Acknowledgments xi
Introduction 1
Our Damaged Economy 2
Congress's Role in Wealth Destruction 8
Summary 9
Notes 10
CHAPTER 1 What Is the Congressional Effect? 13
How Was the Congressional Effect Discovered? 14
Early Returns Showing the Congressional Effect 19
The Smoot-Hawley Act: The Mother of All Congressional Effects 23
The Congressional Effect Data and Launching a Mutual Fund 24
Summary 26
Notes 26
CHAPTER 2 The Congressional Effect and the Limits of Modern Portfolio
Theory 27
How MPT Has Been Used by Financial Advisers 30
Formulas Distort Valuation if Inputs Are Not Free Market Inputs 33
What Caused the Crash of 1987? 36
The Magnitude of the Crash of 1987 Refutes MPT 38
MPT Assumes All Daily Pricing Is Random, but the Congressional Effect Shows
It Is Not 39
Summary 41
Notes 42
CHAPTER 3 Congressmen as Issues Entrepreneurs 43
The Time-Money-Vote Continuum: Congress as a Business 44
Congressmen as Traders and Real Estate Entrepreneurs: Making Money Outside
Their Day Gig 54
Summary 57
Notes 58
CHAPTER 4 Behavioral Finance, the Stock Market, and Congressional
Dysfunction 59
Overview of Behavioral Finance Concepts 60
Survey of Behavioral Finance Concepts 61
Congress's Approach to Behavioral Finance 67
Summary 78
Notes 78
CHAPTER 5 If Congress Is Malfunction Junction, What's Its Function? 81
Economic Lifeblood: Investment Capital Formation, the Stock Market, and
Congress 81
Dodd-Frank Overview 90
Health Care Reform 95
Burning Coal and Other Energy Investors 103
Summary 110
Notes 110
CHAPTER 6 Where Will Washington Strike Next? 113
Where You Can Find Information 114
How to Leverage This Glut of Information 123
Summary 124
Notes 125
CHAPTER 7 Sidestepping Congress's Wealth Destruction with a Macro Approach
127
11,832 Data Points Support the Congressional Effect Theory 128
Congress and the Tragedy of the Commons 130
Adam Smith, Call Your Office! 131
Summary 136
Notes 136
CHAPTER 8 Are Democrats or Republicans Better for Your Portfolio? 139
Who Gets the Credit for the Bull Market in 1980? 140
Unified Government Favors Nominal Returns 142
Split Government Favors Real Returns 145
Republican Congress vs. Democratic Congress 146
Filibuster-Proof Majorities Hurt Returns 147
Summary 148
Notes 149
CHAPTER 9 Leverging the Election Cycle 151
The Presidential Cycle and Real Returns 152
The 2012 Election and Beyond 156
Notes 157
CHAPTER 10 Are Lame Ducks, Impeachments, Resignations, Vetoes, and
Litigated Elections
Good for the Market? 159
President Bill Clinton 161
President Andrew Johnson 165
Resignations 167
Lame Duck Sessions 167
Litigated Elections 168
Vetoes 170
Summary 171
Notes 171
CHAPTER 11 More Ways to Dodge Congress's Stray Bullets 173
Value Funds: Longer Time Horizons than Congress or the Somali Pirates 174
Gold Funds: Avoiding Congressional Debasement 177
Beyond Congress: International Funds 179
Reducing Global Security Risk 181
Summary 182
Notes 183
CHAPTER 12 ''That Government Is Best that Governs Least'' 185
Prognosis: Increasingly Partisan Politics Is Not Good for the Market 185
Conflicting Government Mandates Promote Market Instability 189
The Cumulative Effect of Unintended Consequences Is Congressional Wealth
Destruction 191
Congress's Dysfunctionality and the 2012 Election 193
What Happens When Congress Does Not Know the Price? 195
Congress Needs to Attract the Best Talent 197
In Conclusion 198
Notes 199
About the Author 201
Index 203