Trade the Congressional Effect: How To Profit from Congress's Impact on the Stock Market

Chapter 5

If Congress is Malfunction Junction, What's its Function?

It is the central thesis of the Congressional Effect that Congress generally hurts stocks. The support for this is overwhelming on a daily basis and on a longer-term basis, with sectors affected. Without trying to put too fine a point on it, I view Congress's efforts as mostly ranging from dysfunctional to extremely dysfunctional because their primary goal is to extract rents. Parasites that kill off their hosts have the most regret, and I am sure that someday there will be a recorded instance of actual regret for what might have been.

This chapter looks at several key industries, outlining the impact of Congress on them and their stocks, and uses those histories to show how you can profit from Congress's relentless dysfunctionality.