Four Favorite Stocks of Nancy Pelosi and Her Husband to Buy

Paul Dykewicz

[U.S. flag in shape of U.S.]

Four favorite stocks of Nancy Pelosi and her husband to buy gained the spotlight after a single day of purchases that included shares valued between $501,000 and $1 million in one company, along with call options in three other household-name businesses for a combined $1,250,003 to $2,500,000, according to the House Speaker’s financial disclosure reports.

The four favorite stocks of Nancy Pelosi and her husband to buy consisted of investments that would appreciate if the companies succeeded, and each also likely would be helped by passage of a federal stimulus package of $900 billion signed into law by former President Trump on Dec. 27 and a new $1.9 trillion funding bill that could be approved by Congress soon for President Biden to sign. Whether investors may want to follow the lead of the House Speaker and her venture capitalist husband Paul Pelosi should be based on their personal financial resources and goals rather than political preferences.

The power couple’s trades on Dec. 22 led to the purchase of 20,000 shares of New York-based investment management and research firm AllianceBernstein Holding L.P. (NYSE:AB), as well as buying call options in technology giant Apple (NASDAQ:AAPL), electric vehicle manufacturer Tesla Inc. (NASDAQ:TSLA) and entertainment and leisure giant Walt Disney Co. (NYSE:DIS). The call options are bullish trades that give the buyer the right to purchase shares in each stock for a specific amount, called the strike price, until the expiration date.

House Speaker Pelosi and her husband purchased 100 call options at a strike price of $100 in Apple that expire January 21, 2022, 25 call options with a strike price of $500 in Tesla that expire on March 18, 2022, and 100 call options priced at $100 in Disney that expire on January 21, 2022. The value of each trade ranged between $250,001 and $500,000 for the acquisition of Apple call options, and spanned $500,001 and $1,000,000 for the Tesla transaction and $500,001 and $1,000,000 for the Disney deal.  

Source: Clerk of the U.S. House of Representatives

Political Critic Praises Four Favorite Stocks of Nancy Pelosi and Her Husband to Buy

“Speaker Pelosi and I don’t see the world through the same political lens, but when it comes to where she puts her money, well, I can’t fault any of her vision,” said Jim Woods, editor of Successful Investing, Intelligence Report and Bullseye Stock Trader. “I am pleased to learn that Pelosi is a fan of Apple, Disney, AllianceBernstein and particularly Tesla. And while I might not like the politics the speaker pushes, her decision to push her own money into these stocks is one that I would be inclined to vote for.”

Columnist and author Paul Dykewicz meets with stock picker Jim Woods before COVID-19.

There are several caveats to keep in mind whenever someone considers investing based on someone else’s required financial disclosure forms.

First, Speaker Pelosi and her husband are “very wealthy people,” said Bob Carlson, chairman of the Board of Trustees of Virginia’s Fairfax County Employees’ Retirement System with more than $4 billion in assets. The investments mentioned in the document are a “very small portion” of their net worth, he added. 

Estimates of the net worth of Speaker Pelosi and her husband vary from tens of millions of dollars to upward of $100 million. The International Business Times reported in September 2020 that Speaker Pelosi is one of the wealthiest members of Congress, with a net worth of $114 million, but that is near the high end of public estimates. 

Unique Factors May Affect Four Favorite Stocks of Nancy Pelosi and Her Husband to Buy

Speaker Pelosi and her husband could have made the four investments because of unique information, insights, or intuition, Carlson said. But the investments also could be “fun money,” or similar aggressive strategies often engaged in by wealthy people, he added.

“Second, we don’t know the time frame and price targets of the investments,” said Carlson, who also heads the Retirement Watch investment newsletter. “Options trades typically are made by people expecting to profit within a short time.”

As a result, Speaker Pelosi and her husband might have exited the trades before the investing public learned about them, Carlson continued.

“Third, we don’t know the rest of their portfolio,” Carlson counseled. “The options trades could be some kind of hedge, or a position used to balance or offset other positions. There also could be tax reasons for making trades. We can make assumptions, but we don’t really know.”

Pension fund and Retirement Watch leader Bob Carlson answers questions from Paul Dykewicz prior to COVID-19-related social distancing.

Four Favorite Stocks of Nancy Pelosi and Her Husband to Buy May Be His Picks

As a venture capitalist and owner of a San Francisco-based investment firm called Financial Leasing Services LLC, Paul Pelosi may well be directing the trades for his politically powerful wife and him that she reports to the U.S. House of Representatives.

“He’s been an active trader over the years with a taste for blue-chip stocks,” said Hilary Kramer, who hosts the nationally aired “Millionaire Maker” radio program and heads the GameChangers and Value Authority advisory services. “To his credit, he doesn’t seem to sell bad news or short companies that stand to suffer if his wife votes to raise taxes, tighten regulations or otherwise gets in their way. Betting against those companies is a very different story. We only buy short-term puts in my options services like High Octane Trader when we see that the stocks have gotten ahead of themselves. Long term, I’m a perma-bull and it looks like Paul Pelosi is, too.

“His timing is often more what I’d call opportunistic than calculated. What exactly happened on December 22 that triggered these trades? A fresh round of stimulus finally passed, but it wasn’t exactly a consumer windfall. If anything, the COVID-19 narrative got worse for companies like Disney. He missed all of his quarterly dividend payments, which is a fairly big reason to buy a company like AllianceBernstein. And while the Tesla options have done well, he left a lot of money on the table for someone who theoretically had an inside track. That was a conservative bet on a powerhouse stock on the eve of its addition to the S&P 500. And yet he paid extra to buy an extra year for it to pay out.”

Paul Dykewicz conducts a pre-COVID-19 interview with Hilary Kramer, whose whose premium advisory services include IPO Edge, 2-Day TraderTurbo Trader and Inner Circle.

Four Favorite Stocks of Nancy Pelosi and Her Husband to Buy Raise Questions 

The outlook of the four favorite stocks of Nancy Pelosi and her husband to buy is a different question than whether congressional leaders or any lawmakers should be trading from their privileged perch that gives them access to information about new laws and regulations that would not be available to the public. For example, as the top leader of the U.S. House of Representatives, Speaker Pelosi can help to direct if a federal stimulus package will be passed and when it may happen, since she and her fellow Democrats control the House, the Senate and the White House.

“As far as I’m concerned, everyone in the government should be bound to the same rules that prohibit corporate insiders from getting ahead of the general public,” Kramer said. “The simplest way to do this is for politicians, as well as their close relatives and confidants, to delegate supervision of their investment accounts to an outside advisor during the time of office.

“The alternative is for the politician to face suspicion of passing on tips, especially when the trades go well or benefit him or her directly in some way. A spousal account definitely qualifies for that, so unless Nancy Pelosi wants to recuse herself from every single briefing and vote that weighs on her husband’s positions, she would have saved herself a lot of headaches by asking him to stop trading their account years ago.”

Four Favorite Stocks of Nancy Pelosi and Her Husband to Buy Include Dividend Payers

I personally like the purchase of AllianceBernstein as a dividend stock for income-seeking investors, such as retirees or risk-averse investors who are worried about another market plunge similar like the one that occurred last year between Feb. 20 and April 7. The stock offers a dividend yield of 7.17% and trades at a modest price-to-earnings (P/E) of 14.17, but also comes with risks.

Source: Stock Rover

One seasoned Wall Street trader who has recommended investing in AllianceBernstein successfully three times since 2013 is Bryan Perry, who writes a monthly newsletter called Cash Machine that features dividend-paying equities. On each occasion, he included the AllianceBernstein purchases in Cash Machine‘s Accelerated Income portfolio.

Paul Dykewicz interview Bryan Perry at MoneyShow event in Orlando, Florida.

One trade occurred on October 28, 2013, and Perry counseled to hold the position until July 15, 2015, when he recommended selling for a 29.32% gain. The second trade took place on March 27, 2018, but he advised selling just five months later on August 28, 2018, for a profit of 20.84%. Perry’s third trade of AllianceBernstein began on January 7, 2020, before ending slightly more than 10 months later when he called for his subscribers to sell the stock for a 28.38% return.

With that track record of returns in recent years from AllianceBernstein, I called Perry, who also heads the Premium Income, Quick Income Trader, Breakout Profits Alert and Hi-Tech Trader advisory services, to ask why he currently is out of the position. Two key reasons that he cited are the stock’s now-elevated price and the annoyance that comes with the K-1 forms that master limited partnerships (MLPs) send their shareholders to review and report relevant information when filing tax returns.

Chart courtesy of www.StockCharts.com

Four Favorite Stocks of Nancy Pelosi and Her Husband to Buy Include K-1 Form

I once asked a tax accountant what he recommended investors do when they have a holding that sends them a K-1 form. His response was, “sell it.”

The time required to deal with the paperwork did not seem worth it to the tax accountant. If House Speaker Pelosi’s husband makes the buying and selling decisions in their investment portfolio, it also is likely he handles the K-1 reporting requirements, too. If the House Speaker herself took up the tedious task of tax preparation, she may have championed the simplification of the complicated K-1 forms while serving as a U.S. representative from California since 1987.

Stock Rover, a provider of investment research and analysis, ranked AllianceBernstein among its top choices among dividend stocks. For a free two-week trial of the Stock Rover service, click here to sign up.

Source: Stock Rover

Four Favorite Stocks of Nancy Pelosi and Her Husband Include Apple

Apple rose and then pulled back after Speaker Pelosi and her husband purchased call options aimed at profiting from the stock’s ascent. The stock also offers a modest dividend yield of 0.60% and trades at a P/E ratio of 36.89. 

Chart courtesy of www.StockCharts.com

Apple specifically could be helped by federal policies favorable to clean energy, since it is seeking to become engaged in electric vehicle and autonomous driving technology in the next few years, Kramer said. For example, news reports in Asia indicate that Apple plans to invest $3.6 billion in South Korea’s Kia Motors Corp. to collaborate with the car builder to develop electric vehicles.

Four Favorite Stocks of Nancy Pelosi and Her Husband to Buy Led by Tesla

Despite Tesla’s towering 12-month P/E ratio of 171.13, compared to the domestic automotive industry’s 16.94, the company has been attracting new shareholders willing to pay the lofty price. Tesla’s Chief Executive Officer Elon Musk gained major news coverage on Feb. 8 when he announced company is investing $1.5 billion in Bitcoin and will accept the cryptocurrency as payment for its vehicles.

The stock has risen since Speaker Pelosi and her husband purchased shares in the company. As an advocate of clean-energy polices, Speaker Pelosi should benefit directly from any legislation, regulation or executive orders of President Joe Biden that support the sale of electric vehicles (EVs) from Tesla and other manufacturers that will offer an alternative to cars and trucks powered by conventional internal-combustion engines (ICEs).

Brian A. Johnson, automotive industry analyst with Barclays, is among those who describes Tesla as overvalued. However, Tesla now able to ramp production, fueled by newly raised capital that takes away much of the downside risk to TSLA, he mentioned in a recent research note. Johnson’s target on Tesla is $230, less than half its current share price.

Chart courtesy of www.StockCharts.com

Disney Is Among Four Favorite Stocks of Nancy Pelosi and Her Husband to Buy

Jessica Reif Ehrlich, a seasoned media and entertainment analyst with BoA Global Research, recently wrote favorably about Disney. She predicted brighter days ahead for the company with gradual increases in capacity at its theme parks and hotels.

She predicted a loss of 55 cents per share in Disney’s first quarter of 2021 but a gain of $1.06 per share for full-year 2021. Her “buy” rating of the stock remains intact, aided by “robust” Disney+, Hulu and ESPN+ streaming services. 

Key catalysts include: (1) Disney+ price increases and more widespread launch in Japan, (2) theme park re-openings and capacity increases and (3) resumption of feature film/TV releases.

Chart courtesy of www.StockCharts.com

Four Favorite Stocks of Nancy Pelosi and Her Husband to Buy Despite COVID-19

The COVID-19 pandemic killed more than 100,000 people in America in January 2021 to account for the biggest death total of any month since the deadly virus began to spread in the United States near the start of 2020, according to Johns Hopkins University. Approval by the Food and Drug Administration (FDA) of the first COVID-19 vaccines is lifting hope as the highest-priority people receive injections and the coming months may restore a semblance of normalcy if the virus can be contained.

COVID-19 cases have soared to heart-breaking totals and continue rising as a second surge of infections rages. The number of cases reached 27,189,761 and led to a distressing 486,106 deaths in the United States, as a huge part of 106,903,452 cases and 2,341,004 deaths worldwide, as of Feb. 10, Johns Hopkins University reported. America has the dubious distinction as the nation with the most cases and deaths.

Four favorite stocks of Nancy Pelosi and her husband to buy offer ideas to investors about what a politically and financially savvy power couple find compelling purchases. Each individual investor needs to assess his or her level of risk tolerance and goals to determine whether any of the four trades by Nancy Pelosi and her husband on Dec. 22 may be appropriate nearly six weeks later for less affluent people.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street JournalInvestor’s Business DailyUSA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others.

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