The Pelosis Have Millions Riding on This Chipmaker

Guess who owns $6.5 million in shares of Nvidia?... The Pelosis have millions riding on this chipmaker... Introducing Capitol Trades... What's the use?... Fed officials in hot water... Dave Lashmet's chip tip...

On July 23 of this year, the Pelosi household bought almost $1 million in shares of leading chipmaker Nvidia (NVDA)...

How do I (Corey McLaughlin) know?

Although Speaker of the House Nancy Pelosi was born in Baltimore, where I live and where Stansberry Research is headquartered, I don't have any direct connection to her...

And we certainly haven't been over to her house in California for dinner...

But I know that her husband, Paul – who owns a San Francisco-based real estate and venture-capital firm – hit the "buy" button on 5,000 shares of NVDA back on July 23, three days after a 4-for-1 stock split that brought the share price down to around $195.

That's a stock purchase worth nearly $1 million.

But they were just part of the buying that day. Paul Pelosi also bought 50 call options on NVDA (a bullish bet on 5,000 more shares) worth between $250,000 and $500,000.

And he made those trades six weeks after making a pre-stock-split bet on Nvidia shares too...

On June 3, weeks before the July 23 split, Pelosi bought another block of 50 call options with a strike price of $400. After the split, these options would control 20,000 shares of NVDA compared to the original 5,000. (One options contract equals 100 shares.)

And on went the profits... Now, there was nothing necessarily nefarious about these trades. Nvidia announced it was splitting its stock on May 21. Anyone could have made these buys based on this information...

But, add it all up and, unless Paul or Nancy Pelosi have sold any of these positions in the last 45 days (we'll explain why), the Pelosi household owns 30,000 more shares of NVDA today than they did at the start of June.

Thirty-thousand shares of NVDA today are valued at roughly $6.5 million.

If you find this at least partially interesting and eyebrow-raising, you are not alone...

Do they know something everyone else doesn't? While we can't answer that question, we can let you know how to find out what stocks and bonds the Pelosis and other politicians are buying.

This information – and the trading activity of Congress – is publicly available for a reason. It has been for nearly a decade... since 60 Minutes sounded the alarm on Congress' huge stock returns in 2011.

The STOCK Act of 2012 requires all members of the House and Senate to disclose any financial transactions of stocks, bonds, commodities, and other securities within 45 days of the trade... rather than within a year, as was the law previously.

In typical congressional fashion, STOCK is a handy acronym for the "Stop Trading on Congressional Knowledge" Act. It was designed to combat insider trading... Whether it does is another question.

All it requires is that members of the House and Senate (and their spouses or dependent children) disclose what they're buying and selling on their office's website after the fact. That's better than nothing, but it still doesn't stop all politicians from using information not available to the public to their advantage...

You might remember, for example, the U.S. senator from Georgia, Kelly Loeffler, coming under fire for selling $20 million in stock after attending a closed-door Senate briefing on COVID-19 in January 2020. That information about Sen. Loeffler's stock sale came out because of the STOCK Act.

Still though, most people don't know this data is available... or, frankly, have the time to follow it... or maybe even care.

But we do, and as I'll explain in today's Digest, this data – what members of Congress or their families are trading – can tell investors a few things... and say something broader about today's investing environment in general.

One of the most popular congressional trading tracking websites today is called Capitol Trades...

On this website, you can find any trade made by any member of Congress and search by categories like name, company, or date. Check it out for yourself here... and have fun. (Note: We have no relationship with this website, I happened to come across it recently.)

As Capitol Trades says on its front page...

Why follow these trades? Capitol Hill politicians have access to non-public information that might influence their investment decisions; so tracking their trades can provide valuable insights for your investment research...

The site also analyzes congressional trades by the most bought or most sold stocks, sectors, etc., over the last year. You can quickly go down a rabbit hole looking at the trading history of your favorite senators and congressmen.

For instance, the top three most bought stocks of the last 12 months by members of Congress have been Microsoft (MSFT), Nvidia, and Alphabet (GOOGL). Paul Pelosi is on the latter trade too, buying $4.8 million worth of Alphabet back on June 18.

Now, could members of Congress or their families (an easy way to get around saying they are actually doing the trading) simply think these companies are a good place to park their money? Sure. But for anyone who is not in Congress, it makes you wonder what they know that everyday investors don't...

But before you go buying the same things that you see Congress buying, let's be clear...

I'm not suggesting you make trades based on this publicly available data... But it can add context to what you see in the markets.

If the husband, albeit one well-versed in the markets, of the Speaker of the House – who happens to be negotiating a proposed $3.5-trillion infrastructure bill – owns 30,000 shares of one of America's largest chipmakers... and stock of a tech giant that will supposedly face an antitrust movement... it gets us thinking...

Will chipmakers figure into the bill? Is Google "out of the woods" when it comes to meaningful antitrust legislation?

Again, we're not going to decide to buy or sell solely based on one piece of trading data alone, but this is all information to consider... a trail of crumbs that's worth following if you're into the markets.

It's no secret that Congress is made up of a disproportionate number of millionaires when compared to the general U.S. population. In 2018, 52% of Congress members were millionaires... while 7% of the general population was.

With the annual salary for most in Congress being roughly $175,000, it makes you wonder what they know that "We the People" don't.

The WallStreetBets crowd is starting to catch on, too...

Here's another part of this story worth watching...

You no doubt remember the WallStreetBets crowd, responsible for taking down Wall Street short sellers of companies like GameStop (GME) and AMC Entertainment (AMC).

Well, congressional trading data could be next up as the fuel for a speculative frenzy.

Our Stansberry NewsWire analyst Nick Koziol pointed out to us this morning that some of those same message-board traders have picked up on the information available on websites like Capitol Trades.

They have blindly followed politicians into positions, creating a cycle of higher prices. "If a $1 million buy is good enough for Mr. Speaker of the House, why not me?" is the thinking.

Greed still lives in a "Melt Up" world...

And it's not just Congress that likes to trade...

Last week, two members of the Federal Reserve system hit the headlines for the wrong reasons, when their recent trading activity raised a few eyebrows...

Boston Fed President Eric Rosengren and Dallas Fed President Robert Kaplan's personal trading activity was revealed in their annual portfolio disclosures.

Kaplan's disclosure showed that he bought and sold shares of the iShares Floating Rate Bond Fund (FLOT), which tracks bond prices that would be influenced by the Fed's own rate policies and projections.

We can't think of an ETF that would fall more into the "conflict of interest" territory than FLOT.

And Rosengren showed owning stakes in four different real estate investment trusts ("REITs")... including at least one that holds those mortgage-backed securities that the Fed has been buying billions of dollars of each month since June 2020.

Both have said they will sell their individual positions by September 30, but also say they did nothing that violated Fed policy...

How could this happen? According to Bloomberg...

The U.S. president nominates the seven governors to the Fed board in Washington, subject to Senate confirmation. But the regional institutions [like Boston and Dallas] are hybrid private-public entities with directors who pick each branch chief, though the board in Washington must sign off. Critics say this means the regional Feds can operate with less disclosure and scrutiny.

"The regional Fed banks are private institutions, and their presidents and directors are not subject to the regulations that apply to all public officials," said Andrew Levin, an economics professor at Dartmouth College who was previously a special adviser at the Fed board. "That's why it's essential for the entire Fed to become fully public."

All we know is that in a world where it feels like the government has more influence on the financial markets than ever before, the trading behavior of those close to the money is worth following.

Because here's the funny thing... Mr. Pelosi is on the right path...

Buying U.S. chip companies isn't a bad idea right now.

In recent weeks and months, we've covered the global situation in the microchip industry...

Not only is there a shortage in chips worldwide related to the pandemic, but the industry is squarely in the middle of a geopolitical showdown involving China, the U.S., and the tiny nation that makes most of the world's chips today – Taiwan.

NewsWire editor C. Scott Garliss wrote about this in the August 23 Digest, when he wrote that industry in Taiwan might have to "go somewhere else" if tensions escalate... meaning the U.S., Europe, and Japan.

And in June, a White House review noted that the U.S. needs to invest in its own manufacturing for "national security" reasons... bringing us back to Paul Pelosi's bullishness on Nvidia...

As we wrote in the August 30 Digest...

The U.S. Innovation and Competition Act of 2021 has already passed in the Senate... And the House of Representatives will make its own version of the bill. It currently totals $250 billion to spur American innovation, including roughly $50 billion in government subsidies for chipmakers.

We're willing to bet it happens. Some of this is already in motion...

We've reported in the past that Taiwan Semiconductor Manufacturing (TSM) – the world's largest contract chipmaker and most advanced manufacturer – announced plans earlier this year to build a $12-billion semiconductor fabrication plant in Phoenix, Arizona.

But rather than loading up on shares of fellow industry leader Nvidia, though, our Stansberry Venture Technology editor Dave Lashmet has identified a relatively tiny firm that's set to profit from what he describes as a chip revival that's coming to the U.S.

And he should know. Dave recommended Nvidia well before Mr. Pelosi was showing his bullishness on the stock... You can note Dave's recommendation of NVDA in our Stansberry Research Hall of Fame, with a 777% return on a partial position.

Over the next decade, Dave expects as much as $1 trillion to be invested in super high-end silicon chip manufacturing in the U.S. This company that he has found is positioned perfectly to take advantage of that...

A few weeks ago, Dave shared his latest research on this company with a wide audience... and if you missed it, good news – the company remains below Dave's buy-up-to price.

He calls this pick "Venture No. 73" and recently put together a presentation with all the details. Click here to get more specifics, plus the chance to grab a full year of Dave's research at a $3,000 discount to the regular price.

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New 52-week highs (as of 9/10/21): Asana (ASAN), Cintas (CTAS), Denison Mines (DNN), Ingersoll Rand (IR), and Palo Alto Networks (PANW).

In today's mailbag, some more feedback stemming from our discussion about the "wealth gap"... What say you? Send your comments or questions to feedback@stansberryresearch.com.

"Both of our political parties are flawed. The Republicans are bad and the Democrats are worse. The Dems are on a fast track to destroy the country to make everyone dependent on government and eliminate fair elections so they can remain in power. The GOP is on a slow track to destroy the country by first enriching themselves and getting reelected. Very few of the federal elected offices are held by those that truly represent the people. I see no path forward that doesn't destroy the country as we know it.

"The very nature of the greatest nation ever to be on earth is being attacked from within and from without. And China is waiting in the wings to take over the planet. They won't need to fight wars, just release a pandemic now and then and watch for the U.S. to put another bullet in its own head. The UN and the WHO are now our enemies, so there is nowhere for us to turn for defense...

"Marxism is creeping into our language and customs, destroying our history and foundations, and taking over huge portions of our citizenry (lemmings) who have no idea of what they are committing themselves to. Since massive corporations now seem more influential than the government itself, I see no way out.

"Not being an expert on the Fed, I see them not just kicking the can down the road, but adding more cans every year and kicking them all down the road. The bale of cans now exceeds what anyone can pay back or even pay interest on. That makes the Fed, and by association, the government, zombies. Their now evident, pure political actions benefit none of the citizens who need it. And it seems they have literally put their money on the Democratic horse." – Stansberry Alliance member Don O.

All the best,

Corey McLaughlin
Baltimore, Maryland
September 13, 2021