Is Tom Carper Shorting The US Economy?

Tom Carper Continues to Outperform Wall Street

Breaking News: 
Tom Carper, is back at it again! If you missed our last update (see it here), we covered Tom Carper and his recent trades. At the time he had just bought Booz Hamilton ($BAH) and sold PayPal ($PYPL).

You'll want to pay attention to that last one, "The Finance Committee". Given both of those two stocks are in the finance sector, it's notable that the performance of those two trades has really gone his way since then.

Looking more closely we see that since buying $BAH, he is up over 20%, while since selling $PYPL, the stock is down almost 20%.

Now we can't know for sure that Mr. Carper had knowledge of any news beforehand, but as a member of the Committee of Finance, it sure looks peculiar.

Is This Senator Shorting the US Economy? 
Now that we've gotten you up to speed, you'll really want to pay attention to this next trade.

• Senator Thomas Carper, once again, has been seen hedging/shorting the US economy. That's because after he last disclosed his previous $PSQ shorts, he had made a ~6.5% gain made in one month alone!

• Fast forward to today and Mr. Carper just disclosed $45k in more $PSQ. For reference, PSQ is a short $QQQ index (e.g. the Nasdaq) and he just made this trade on August 23rd (but published this week).

So should we take this seriously? Well, let's let his track record speak for itself.

His Track Record: 

1. Before the vaccines were announced, Carper was an investor in Resmed ($RMD), Apollo ($APO), and Omega Healthcare ($OHI). However, on 07/09 he sold his positions in all three stocks $RMD, $APO, $OHI. The reason this is so notable is that two weeks later, $RMD dropped by 15% on the news that people no longer needed ventilators and Resmed makes ventilators. Furthermore, after those reports, $APO & $OHI fell by over 10-20% in the following 3 months and they're also all down significantly since then.

2. Senator Thomas Carper bought up to $110k in Ranger Equity Bear Bear ETF ($HDGE) in addition to $SH, and $PSQ -- which are all short ETFs. As a member of the Senate Finance Committee, he was actively shorting the US, and was up significantly, selling all three for large gains before the economy rebounded. If this isn't a conflict of interest, then we aren't sure what is.

3. But we can keep going, on 11/2/20 he purchased Fortinet ($FTNT) which is a cybersecurity company that Congress directly oversees. As of selling the position, Tom closed it out -- up 213%.  And not only does Congress oversee this company, but Tom also chairs the Committee on Homeland Security, which uses their products.

   • Furthermore, he also took advantage of being on the Committee on Homeland Security because he also bought Mosaic ($MOS) and was up 60% before closing it out. If you've never heard of $MOS, they are a company that mines phosphate, potash, and collects urea for fertilizer. And the reason for this company's stock shooting up so high was because these products are highly produced in Russia -- which was massively stunted by the war in Ukraine.

4. Carper also traded heavily in semiconductors before the Chips Act and had the second-highest return out of any Senate member for semiconductors (same offense as Nancy Pelosi buying Nvidia). And what's crazy is that the Senate Committee on Finance was tasked with reviewing the Senate equivalent of the Chips ACT. And once again, Tom sits on this committee!

While we could keep going on, the point is that Mr. Carper's trades usually come ahead of significant events that massively impact his underlying holdings in these companies.

Therefore while we aren't making trades based on this information, it does act as a supporting/opposing datapoint into whichever stocks we're investing in. 

Why it matters: 
Therefore, it's clear that Mr. Carper's trades should continue to be heavily watched. While we're not selling off our entire portfolio, we should continue to monitor his positioning to see if he thinks this will persist or not.

From what we've seen from his prior trading history, chances are this is a short-term behavior based on the direction of rates & his committee's relationship with the Fed.

While there's not much to do here in the long run, it's just another example of using politician trading data to figure out what's coming next in the market!