Ro Khanna Is Betting on a Bottom in Stock Market
Ro Khanna, the U.S. representative from California's 17th congressional district since 2017, disclosed he made two large trades in the second half of October.
Congressman Khanna invested between $500,000 to $1 million in each of the SPDR S&P 500 ETF Trust (SPY:US) and iShares Russell 1000 Value ETF (IWD:US). SPY is the largest and one of the pioneering ETFs in the world, designed to track the U.S. benchmark stock index S&P 500.
IWD, on the other hand, invests in large-cap value stocks, which include companies like Berkshire Hathaway (BRK:US), Exxon Mobil (XOM:US), Johnson & Johnson (JNJ:US), Chevron (CVX:US), Pfizer (PFE:US), Walmart (WMT:US), etc.
Given the size of these trades, as well as the timing, it can be said that Congressman Khanna is betting that equities are in the process of bottoming out. He invested in the SPY on the day when the index closed at $365.41. Based on yesterday’s closing price, Rep. Khanna’s position is over 8% in the green.
The long position in IWD has made even bigger progress with the value-focused ETF up almost 10% since the day Mr. Khanna made his investment.
Both SPY and IWD were trading near their multi-year lows in the third week of October, offering investors a chance to bet that the market may be in the process of bottoming out. The rebound in stocks was fueled by the softer-than-expected U.S. CPI report for October, fueling investor hopes that the Fed may be pivoting away from its ultra-hawkish monetary policy.
Ultimately, it remains to be seen whether Mr. Khanna made this investment as he truly believes the bottom is in for stocks, or he was simply looking to take advantage of another bear market rally.