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America’s Best Energy InvestorsBy Graham SummersWednesday, September 13, 2006 If you’re looking for expert financial advice on the TV, turn off Jim Cramer, forget Squawk Box, and stop checking out the money honey, Maria Bartiromo.
Instead, turn on C-Span…
According to a study published by the Robinson College of Business at Georgia State University, between 1993-1998 U.S. senators beat the market by an average of 12%. Let me be extra clear here: they didn’t just average 12%… they BEAT the market by an average of 12%.
It makes sense; Senators know which legislation is about to be passed. And it’s a simple step to figure out which companies would profit from new laws.
Senators also know which company is about to be awarded a government contract and which product or drug is about to be approved. It’s not too difficult to see how this information could be used to make some incredible gains.
Yes folks, we’re talking about insider trading in the political arena.
Lately, I’ve been keeping a close watch on the investments of the Senate’s Energy and Natural Resources Committee: A group of 21 senators in charge of overseeing all legislation pertaining to the energy industry in the United States.
According to the Senate website, this committee has “overseen some of the most important legislation ever enacted by the United States Congress” — including President Bush’s just-passed Energy Bill, signed into law in New Mexico on August 8, 2005.
One of the more active investors in the group is Senator George Allen (R-Va).
Allen bought metallurgical coal producer Fording Canadian Coal Trust (FDG) sometime in 2002. I say “sometime” because we can’t be sure of the exact date. Unlike corporate insiders, who have to file every transaction they make with the SEC, Senators only have to file their financial holdings once a year.
Personally, I don’t care what day George Allen bought Fording. Looking at a five-year chart of the company and its historical prices, it’s clear he bought somewhere below $5 per share. Today, Fording trades around $27 per share. Allen more than quadrupled his money in four years’ time.
Currently Senator Allen owns:
-Devon Energy (DVN)
-Chevron (CVX)
-EnCana (ECA)
-ConocoPhillips (COP) (also owned by Warren Buffett)
If you’re looking for some insight into the future of energy prices, you might want to consider that the guy responsible for writing energy laws is loading up on big energy.
Like I said, turn on C-Span.
Good investing,
Graham
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U.S. Oil Fund now down 18% from August high.
Defensive stocks still carry the day… pharmaceuticals, telecoms, and food lead the new highs list.
Construction materials powerhouse Rinker Group at new low.
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