This looks for stocks that may rise after a drug company gets bad news. The trigger is a member of Congress buying a stock that just had a big late-stage drug study (a Phase 3 trial, the final test before approval) shut down. The idea is that the price drops hard on the headline, and a lawmaker buying anyway may be betting the rest of the company's drug pipeline is still worth more than the panic suggests.
Updated Oct 17 · 1 feed behind: Congress trades, 1 day · Every feed →
On this page
How the test works
The planned holding period in these tests is 6 months (180 days), from opening to closing an idea.
1
Buy it when it fires
At the next trading day’s close after the record posts — the first price anyone could have had.
2
Hold 6 months
day 1day 180
The same hold for every idea — no stop, no target — so nothing flatters the numbers.
3
Sell 6 months later
At the next available trading close on or after the end of the hold, whatever the price.
Every number on this page uses this sell rule — the other sell rules we tested are under “The full test results and the math” below.
How it did in past tests
⚪ Research only — not yet confirmed by new trades
Publication check: Research only
Not passed yet — 4 of 16 checks:
Its edge leans on one year: without its best year it doesn't hold up.
It needs at least 20 finished trades on 10 separate days after the rule was frozen.
Some of those new trades are still open; each has to finish its full hold.
Those new trades then have to beat similar stocks after costs, by more than luck across every rule we tried.
Passed — the other 12: Current calculation · Public disclosure dates · Complete finished trades · Every trade compared · Every trade priced · Enough separate trading days · Positive edge after costs · Survives without the best three stocks · Survives higher costs · Rule frozen before the test · Rules tried alongside it counted · First new signals set aside.
Tested exit: 6-month hold. Historical results alone do not approve a rule for publication. New event tests include an estimated 0.20 percentage point round-trip trading cost, with a 0.50-point stress check.
New trades so far: 0 finished, across — separate days after the rule was frozen.
0 signals set aside across 0 disclosure days; 0 still need complete results. Missing results stay in the count.
Average difference in past tests+5.9 percentage pointsagainst similar stocks, over 6 months
−6.0 pp0+6.0 pp
Left: did worse · right: did better. Zero matches the comparison. pp = percentage points; the scale adjusts to include the result.
In past tests, each idea returned
+10.2%
on average after 6 months · 73 tries
Similar stocks returned
+4.3%
this did 5.9 percentage points better
Made money in
51 of 73
tries (70%)
73 tries finished the 6-month test · 10 still open · 91 signals ever
Past results don't predict future ones.
Similar stocks means the index fund for each idea's sector — or the S&P 500 when we can't place its sector.
How it did against similar stocks
5.9 percentage points better than similar stocks — over 6 months
Range for the average (95%)
+0.3 pp to +10.8 pp vs similar stocks — the range the average probably falls in, not a best-to-worst case
Tested on enough tries?
73 tries on 58 separate days ✓ enough
Works in different markets?
More than all of the edge came from a single year (113%) — the rest took some back ⚠ one year did most of it
Results include an estimated 0.20 percentage point round-trip trading cost. Real fees and fills can differ. The same company can show up more than once, and ideas that overlap in time can move together. These are single ideas, not the growth of one account, and not a forecast.
Who this fired on
The disclosed trades behind this rule's newest ideas.
pp means percentage points: the difference between two returns. Actual returns are shown in %.
Average result (6 months)
+10.2%
range for the average (95%): +3.9% to +16.5%
Edge over similar stocks
+5.9 pp
range for the average (95%): +0.3 pp to +10.8 pp
Held a year instead: +23.5% on average (59 tries).
If you had the member's own timing — which nobody can: the trades are disclosed 30–45 days later — +8.3% on average after 6 months (85 tries), 4.3 percentage points better than similar stocks.
Steadiness (Sharpe ratio) 0.81 — solid: how even the results were from one try to the next.
Every sell rule we tested
The same ideas, sold different ways. Headline results use the 6-month hold. A declared exit stays fixed for the calculation; choosing a winner from this table after seeing its results can overstate the evidence.
Sell rule
Average result
Middle result
vs similar stocks
Tries
1-month hold
+1.9%
+2.0%
+0.9 pp
82
3-month hold
+5.9%
+5.1%
+4.6 pp
75
6-month hold (headline comparison)
+10.2%
+8.5%
+5.9 pp
73
1-year hold
+23.5%
+17.6%
+14.4 pp
59
8% trailing stop · held about 55 days
+6.2%
−3.7%
+4.8 pp
59
15% trailing stop · held about 318 days
+17.7%
+12.9%
+11.9 pp
59
Sell at a 20% gain · held about 231 days
+10.5%
+20.1%
+6.4 pp
59
Sell at a 35% gain · held about 366 days
+16.5%
+23.3%
+8.6 pp
59
Sell at a 50% gain · held about 366 days
+22.5%
+17.6%
+13.9 pp
59
Sell at an 8% loss · held about 366 days
+16.9%
+2.5%
+10.5 pp
59
Sell at a 12% loss · held about 366 days
+18.1%
+10.7%
+10.6 pp
59
Sell at a 20% loss · held about 366 days
+23.4%
+17.6%
+14.1 pp
59
Sell at a 20% gain or a 10% loss · held about 144 days
+8.1%
+19.9%
+5.3 pp
59
Sell at a 30% gain or a 15% loss · held about 276 days
+13.5%
+23.3%
+7.4 pp
59
Sell at a 50% gain or a 25% loss · held about 365 days
+22.9%
+17.6%
+13.8 pp
59
Volatility stop (2×) · held about 22 days
−0.3%
−0.7%
−0.4 pp
59
Volatility stop (3×) · held about 37 days
+2.9%
−0.7%
+1.6 pp
59
Sell below the 10-day average · held about 14 days
+0.1%
−0.1%
+0.2 pp
59
Sell below the 20-day average · held about 21 days
+0.5%
−0.1%
+0.2 pp
59
Sell below the 50-day average · held about 29 days
+2.8%
0.0%
+2.3 pp
59
Sell below the 100-day average · held about 41 days
+0.4%
−0.8%
+1.0 pp
59
Sell below the 200-day average · held about 85 days
+6.8%
−0.2%
+5.1 pp
59
Breakeven stop after a 5% gain · held about 326 days
+19.9%
−0.4%
+12.6 pp
59
Breakeven stop after an 8% gain · held about 366 days
+20.1%
−0.3%
+13.1 pp
59
Breakeven stop after a 15% gain · held about 366 days
+22.2%
+14.9%
+13.7 pp
59
Risk and style checks
After style factors (market, size, value, momentum…) the edge is +9.1 pp instead of +4.6 pp — the edge holds up after them. Tilts: Momentum −1.23 · Size +0.90 · Profitability −0.80 · R² 0.33.
The stocks it picked trade a median $1.1B a day; 0% of its ideas were in thin stocks (under $2M a day).
At one percent of that volume a trade is about $10.9M; with 10 ideas open now, an equal-weight book is about $109M.
The edge by market fear on the day it fired (the VIX): calm +6.2 pp (24 tries) · normal +3.6 pp (47 tries) · stressed +7.2 pp (4 tries).
