We have recently put together a list of the 10 Stocks That Members of Congress Own. This article will analyze how Netflix, Inc. (NASDAQ:NFLX) compares with these congressional investments.
Historically, members of the US Congress have been allowed to possess and trade stocks. This practice has faced scrutiny due to potential conflicts of interest and ethical issues surrounding insider trading. Although the topic has sparked public debate, significant action was taken with the introduction of the Stop Trading on Congressional Knowledge Act in 2012, which prohibited Congress members and federal employees from profiting using non-public information and mandated timely reporting of stock trades. However, enforcement of this law has often been criticized because many lawmakers have been accused of failing to report transactions accurately or on time.
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In December 2024, President Biden publicly advocated for a complete ban on stock trading by Congress members, arguing that lawmakers should not profit from the stock market while in office. Similarly, President Trump has long held this view, stating, “We want a ban on members of Congress getting rich by trading stocks on insider information.”
While several US administrations have taken a firm public stance against stock trading by high-ranking officials, the complexities of enforcement can often make the situation murkier. It can be difficult to determine whether a public official utilized insider information for their investment decisions, especially since officials may claim that their trades were based on an analysis of publicly available information. Therefore, investors should recognize that a scenario in which Congress members do not engage in stock trading may never fully materialize.
The issue of stock trading among Congress members has been a topic of interest for investors for years, as trades may signal impending market-moving policies or legislation. This scrutiny has led to the creation of thematic ETFs that track the trades of legislators, enabling retail investors to emulate their investment strategies and potentially benefit from them. Some anecdotal portfolios of Congress members have reportedly outperformed the broader market, underscoring a shift in focus from ethical concerns to practical investment opportunities.
To determine which stocks are predominantly owned by Congress members, we analyzed Periodic Transaction Reports filed by US politicians and compared our findings with our proprietary database of hedge fund holdings as of Q4 2024. Netflix, Inc. (NASDAQ:NFLX) ranks 6th on our list of the 10 stocks owned by Congress. While we recognize NFLX’s investment potential, we believe that AI stocks may offer even higher returns in a shorter timeframe. For those interested in a promising AI stock with a valuation below five times its earnings, we suggest checking out our report on the cheapest AI stock.
