7 Stocks To Buy To Follow in Nancy Pelosi’s Footsteps
InvestorPlace - Stock Market News, Stock Advice & Trading Tips Love her or hate her, House Speaker Nancy Pelosi has turned out to be quite an astute sage regarding stocks...
With the dynamic environment of the post-pandemic market, the incredible abundance of opportunities has proven that some folks — including yours truly — need to get out more often. Now, we all know about the phenomenon of meme-related stocks to buy. But who would have thought prior to the health crisis that U.S. House of Representatives Speaker Nancy Pelosi may be the ultimate meme to rule them all?
At least that’s the message from the ground, where social media traders have crowned her as the “Queen of Stonks.” Per the Merriam-Webster dictionary, a stonk is a deliberate misspelling of the word stock: “The word is often used humorously on the internet to imply a vague understanding of financial transactions or poor financial decisions.” Thus, a possibility exists that copying Pelosi’s ideas for stocks to buy could be an ironic move.
Rest assured, at least in that narrowly defined context, it’s highly unlikely that the House Speaker is playing mind games with retail investors. Specifically, as Business Insider points out, trades carried out by Pelosi’s husband Paul — a venture capitalist — have been successful. In fact, some of the trades have been so remarkable that they have drawn suspicion about insider trading. Thus, copying Pelosi’s ideas for stocks to buy could be lucrative.
To be 100% clear, I am not insinuating that insider trading occurred — that’s a whole lot of ugly that I don’t care to involve myself in. As multiple mainstream publications have reported, Paul Pelosi’s fortuitously timed stocks to buy do not constitute illicit actions based on privileged information. Granted, the situation looks weird to say the least due to the proximity of power and influence. But mere suspicion is not a cause for conviction.
And you can also look at the situation in an optimistic light. Since these ideas are open to the public, you can follow them for the benefit of your own portfolio. Of course, this is a risky strategy but if you want stocks to buy from the best pickers in town, you can check out the below ideas:
- Microsoft (NASDAQ:MSFT)
- Roblox (NYSE:RBLX)
- AllianceBernstein (NYSE:AB)
- American Express (NYSE:AXP)
- Netflix (NASDAQ:NFLX)
- PayPal (NASDAQ:PYPL)
- Nvidia (NASDAQ:NVDA)
For clarity, I’m referring to the transactions summary for Speaker Pelosi if you want to follow along and perhaps consider other stocks to buy not included on this list. Also, her ideas may not necessarily align with mine so please keep this caveat in mind.
Stocks to Buy: Microsoft (MSFT)
Records show that on March 19 of this year, Pelosi exercised two call options on consumer technology giant Microsoft: 150 options (or 15,000 shares) with a strike price of $130 and 100 options with a $140 strike. While some bumps have occurred, generally, it was a remarkably well-executed trade, with MSFT up nearly 33% on a year-to-date basis heading into the first weekend of October.
If you’ve followed my work, you’ll know that I’ve often discussed MSFT as one of the stocks to buy for the long haul. Whether the House Speaker or her husband believes it or not is irrelevant to my bullish arguments. Basically, Microsoft owns the business Software as a Service (SaaS) ecosystem. It’s hard to get stuff done on any other office software suite, particularly because your colleagues and partners also use Microsoft SaaS solutions.
Moving forward, I still think MSFT has room to grow. In particular, the gig economy — or the idea of working for yourself, usually through a home business — will probably thrive once the novel coronavirus fades away. Thus, it’s easy to support MSFT’s candidacy for stocks to buy — and Pelosi’s endorsement makes it that much more appealing.
While critics often blast Pelosi for excessively holding onto power, her ideas for stocks to buy prove that at least when it comes to enriching her portfolio, she always knows what’s up. That vitality was on display when she bought shares of Roblox, an online gaming platform and game creation system.
First, records show that she purchased 10,000 shares of RBLX on March 10 of this year, coinciding with the underlying company’s initial public offering. Prior to my research for this topic, I never got the impression that Pelosi was an IPO bull. Good for her.
Second, Roblox involves video games and caters to a young audience — please forgive me but neither description aligns with the House Speaker. Nevertheless, when it comes to wealth building, she seems to have a very sharp eye.
To be fair, RBLX on paper seems like an intriguing growth narrative. However, the blue-chip stalwart has the better performance. On a YTD basis or since its first public closing price (which is different from its initial offering price), RBLX is up only 9%. Personally, I’m a bit skeptical at this point but I’ll defer to the Speaker on this one.
Stocks to Buy: AllianceBernstein (AB)
AllianceBernstein is much more typical of what you might expect from Pelosi’s portfolio of stocks to buy. Billed as a global asset management firm providing investment management and research services worldwide to institutional, high-net-worth and retail investors, AllianceBernstein purports to help its clients navigate the uncertainty of capital markets.
Presumably, Pelosi has all the help she could ever want. Therefore, if AB is on her portfolio, that’s a major endorsement regarding stocks to buy. Further, she made two purchases early this year. On Feb. 18, she bought 15,000 shares and later on Feb. 23, she acquired 25,000 shares.
True to form, AB has been one of Pelosi’s strongest performers, with a YTD performance of nearly 53%. Undoubtedly, the enthusiasm toward the economic recovery narrative offered a major catalyst to the asset management firm.
Still, moving forward, I would be cautious. Incidents such as the China Evergrande (OTCMKTS:EGRNF) liquidity crisis impose a dark cloud over the stability of Chinese commercial paper. Thus, it’s not out of the question that it could hurt investing sentiment globally.
American Express (AXP)
It’s always interesting to peer into influential people’s ideas for stocks to buy as it provides a better insight into their analytical assessment or personality. With American Express, Pelosi seems to be both a visionary and a realist.
Records show that the House Speaker acquired AXP on June 24, 2020, while the U.S. and other nations were grappling with the initial devastation of the Covid-19 crisis. Although the available data doesn’t show an exact share count, the amount purchased is in the neighborhood between $100,000 and $250,000.
Personally, I think it was a wise move. More than likely, Pelosi reasoned that you shouldn’t bet against America and the nation’s ability to jump back from trouble. At the same time, she must have also reasoned that the wealthier components of the U.S. — the demographic which American Express targets — will be better able to manage the pandemic.
At the same time, it’s cynical, which unfortunately for her plays into the political criticisms she often attracts. Still, as a non-fan, I’ve got to give her credit: When it comes to stocks to buy, she’s consistently on the right.
Stocks to Buy: Netflix (NFLX)
Another bold move that confirms that just because someone comes off as politically weak does not impugn how shrewd they can be in terms of stocks to buy. Again in June of last year, Pelosi pulled the trigger — a metaphorical one since we all know she doesn’t like the literal variety — on Netflix, the world-famous streaming service.
Again, records don’t show the number of shares acquired, although the amount range goes from $1 million to $5 million. Must be a great life “serving” the public! This trade confirms that Pelosi is not as clueless as her Republican detractors claim — or at least not when we’re talking about stocks to buy. With Americans largely stuck at home, NFLX had nowhere to go but up.
Now, to be fair, I think this trade also shows how out of touch Pelosi and the Washington elite are with the rest of America. I mean, the Democrats have been pushing for greater Covid restrictions, the same restrictions that she’s using to enrich herself.
This doesn’t constitute insider trading but boy — that’s some utter cold cynicism coming from the Speaker.
Yet again, Pelosi never seems to disappoint with her sharp mind toward stocks to buy, this time involving digital payments processor and business solutions provider PayPal. Transactions summaries show that the House Speaker made three separate transactions in June of last year, again when the Covid-19 crisis was a deeply worrying and frightful affair.
She must have reasoned that cashless transactions — a long-time trend even before the pandemic — would accelerate with such a magnitude that it would become the go-to standard, even for small mom-and-pop businesses. And innovative firms like PayPal have been making this transition easier, inspiring the bullish case for its equity unit. So far, this narrative has proven successful, with PYPL up 14% year-to-date.
In the years ahead, the post-pandemic environment should help the fundamental storyline for PYPL. Particularly, the rise of the gig economy is a massive boost for PayPal. Not that I’m the arbiter of the company’s utility, but as a fellow gig worker, PayPal the business (I don’t own its stock) has proven its worth.
Still, watch out for volatility threats, especially as it relates to the China Evergrande crisis. Things could get squirrely before they stabilize.
Stocks to Buy: Nvidia (NVDA)
I must admit that I find myself disagreeing with the House Speaker on almost every issue she has opined on. However, if there was ever a “you go lady!” moment (stated among her close colleagues, of course) for the longtime Congressional representative, it’s her insistence on staying abreast on all market-influencing news.
How else can you explain her consistent bullishness on semiconductor producer and all-around tech giant Nvidia? In July of this year, Pelosi made two major transactions on NVDA stock, first going long the equity unit and second buying call options. In the prior month as well, she purchased shares amounting to between $1 million and $5 million.
I want to be clear that my admiration for Pelosi’s stock-picking ventures is centered on her cynicism, the magnitude of which I find absolutely remarkable. It also augurs poorly for the semiconductor crisis. With the supply shortage of electronics-related parts for the automotive industry worse than earlier stats projected, semiconductor firms may enjoy unprecedented relevance for possibly another year or two.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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