What happened?

• US Department of Energy is planning a $4B loan to Vistra Energy to upgrade their nuclear reactors given higher datacenter demand.
• Peter Thiel's fund Thiel Macro bought $59M of VST in Q2, forming 14.1% of their portfolio.
• Trump owns ~$438k of VST (-12.1%) while Pelosi owns $1.1M (-16.4%). VST now trades below their entry prices.
• One of Vistra's lobbyists served at the EPA during Trump's first term as the agency's liaison to Congress and state governments.

1/2 How to spot (it's quite easy!)

• Some members of Congress disclose trades much later than others, or even disclose their purchases and sales on the same day. Though it's easy to spot them :)
• How? Compare their total returns with their delay-adjusted returns. Delay-adjusted means "what if the trade was made on the day of disclosure". Then look at the gap.
• And then? If the gap is wide enough (I'll provide examples below), that politician is not a reliable signal.

2/2 Let's do some examples

• Lisa C. McClain: 1/5, beware!. +336.4% over the last 3Y, but +67.5% delay-adjusted. There is a huge gap. This is caused by her reporting purchases & sales on the same day.
• Ro Khanna: 5/5. +137.7% over the last 3Y, +138.6% delay-adjusted. They're pretty close.
• Ashley Moody: 5/5. +231.8% over the last 3Y, +279.5% delay-adjusted. Delay-adjusted performance being better is totally fine :)
• Tommy Tuberville: 4/5. +242.7% over the last 3Y, +182.3% delay-adjusted. There is a gap but the delay-adjusted performance is strong. Plus, over the last 6M it is +72.3%/+71.5%, so his delays have improved a lot this year.

What does it mean?

• S&P 500 gained +23% on average in the year after midterms with a Republican president and split Congress. (per Morgan Stanley)
• With midterms coming in November, recent polling suggests a split Congress as Democrats are expected to win the House.
• Defense, tech, financial, healthcare and energy stocks have performed best, as a gridlock implies policy stability on major issues.
• This ratio is 95% for the US government's portfolio, 72% for all Congress members, 61% for Trump, and 50.3% for S&P 500.