Political figure Pei Luoxi, known as the "Stock Goddess", earned a century's worth of salary from investments within six months. What were her investment targets and strategies?

Former Speaker of the United States House of Representatives, Nancy Pelosi, who visited Taiwan in 2022, is not only known for her outstanding performance in politics but is also considered a savvy investor along with her husband, Paul Pelosi. According to the Nancy Pelosi Stock Tracker, as of July 1st, her investment portfolio reached a historic high, with a 39% increase in the first half of the year, resulting in a profit of $23 million in just six months, equivalent to her 130 years of salary.

Nancy Pelosi's Options Trading Strategies

According to Autopilot's tracking, Nancy Pelosi's performance last year was 45%. The top five holdings in her portfolio currently are Nvidia, Apple, Microsoft, Broadcom, and Google.

In addition to buying stocks, Pelosi is also skilled at leveraging options. Let's take a look at her recent purchase of Broadcom as an example:

On 6/24, Pelosi disclosed her purchase of options for Broadcom stock (AVGO), consisting of 20 contracts with a strike price of 800, deep in-the-money options as the strike price was significantly lower than the stock price around $1600 at the time, expiring in June 2025. The disclosed transaction amount ranged from $1 million to $5 million.

Based on Nasdaq data as of 7/10, the current price for similar options is $947, with a trading cost of $1.89 million. However, due to Broadcom's lower stock price on 6/24 compared to 7/10, the actual trading cost should be lower than $1.89 million.

The main feature of buying deep in-the-money options is to leverage the high leverage effect of options to achieve high returns. By paying the premium, one can participate in the market. In this specific trade, the estimated cost is expected to be less than $1.89 million. However, if one were to buy 2,000 shares of Broadcom on the same day, it would cost $3.23 million based on the closing price of $1616.

Nancy Pelosi and Nvidia (NVDA)

One of Pelosi's recent notable trades is her bullish move on Nvidia amid the AI boom!

On November 22, 2023, Pelosi purchased 50 call options for Nvidia, with a strike price of $120. The transaction amount was between $1 million and $5 million, expiring on December 20, 2024. At that time, Nvidia's stock price was around $500, and the stock had not yet undergone a 1-for-10 stock split.

Since Pelosi purchased the 50 call options, Nvidia's stock price has surged by nearly 160%. After the split, the stock price is currently around $130. If the options were exercised at an adjusted strike price of $12 reflecting the 10-to-1 stock split, Pelosi would be able to acquire 50,000 shares (50 options x 100 shares x adjusted split of 10 shares).

Let's estimate her profit:

• Cost of buying options: $1 million to $5 million
• Cost if options are exercised: $12 x 50,000 = $600,000
• Current value of Nvidia: $130 x 50,000 = $6.5 million

Unrealized profit of $0.9 million to $4.9 million

On June 24, 2024, Pelosi purchased an additional 10,000 shares of Nvidia, declaring a value between $1 million and $5 million. It seems that Pelosi remains very optimistic about the future development of AI!

Nancy Pelosi and Tesla (TSLA)

However, not all of Pelosi's investments have been profitable. According to unusualwhales.com, on December 22, 2020, Pelosi purchased 25 call options for Tesla (TSLA) with a strike price of $500, expiring on March 18, 2022. The transaction amount was between $500,000 to $1 million.

Controversially, this trade occurred a month after Biden's election. Shortly after Biden took office, he began discussing legislation related to electric power, which was eventually passed later that year, including the "bipartisan infrastructure bill" and an executive order to achieve federal carbon neutrality by 2050.

The stock surged, reaching a peak increase of 75%. On March 17, 2022, Pelosi finally exercised the call options, purchasing 2,500 shares at a price of $500, before Tesla's stock split. Tesla underwent a stock split in August 2022, where 1 share became 3 shares. This meant that Pelosi now owned 7,500 shares of Tesla after the split.

On December 20, 2022, she sold 5,000 shares of Tesla at an average cost of $140.38 per share.

On June 24, 2024, she sold an additional 2,500 shares of Tesla at a closing price of $182.58 per share.

Let's estimate her profit:

• Cost of buying options: $500,000 to $1 million
• Cost if options are exercised: $500 x 2,500 = $1.25 million
• Sold 5,000 shares on December 20, 2022: $140.38 x 5,000 = $702,000
• Sold 2,500 shares on June 24, 2024: $182.58 x 2,500 = $456,000

Loss of $592,000 to $1.092 million due to uncertain option purchase cost

However, Tesla has continued to surge recently. If Pelosi holds for a few more weeks, she may turn the losses into gains!

Is Tesla's skyrocketing price due to being the most undervalued AI stock in the market or a meme stock?

Nancy Pelosi vs. Cathie Wood

Interestingly, Nancy Pelosi's investments in Tesla and Nvidia are in contrast to Cathie Wood, the queen of stocks. ARK Innovation ETF, Wood's flagship fund, liquidated its Nvidia holdings in January last year, missing out on the surge from $120 to $1,200 and facing scrutiny from investors. However, Wood has remained loyal to Tesla, continuing to accumulate shares even when the stock price declined last year, with a price target of $2,600.

ARK predicts Tesla to hit $2,600 by 2029, and Musk says it's challenging but achievable!

From the results, it's clear that both have their strengths. Investing is never foolproof, but maintaining one's investment principles and strategies, more gains than losses, and maintaining a high success rate can lead to excellent returns when the market trends emerge.