Performance of directors’ dealings in relation to German federal election
November 5, 2024
Today is election day for the 2024 US presidential election. A previous blog post showed that the 2020 US presidential election was followed by a positive performance of directors’ dealings in Germany. The next German federal election is less than 11 months ahead. Hence, investors may wonder: What is the performance of directors’ dealings in the year prior to a German federal election? BOSS STOCKS analyzed 186 directors’ dealings (stock acquisitions) in the German DAX which took place within twelve months prior to the last German federal election day on September 26, 2021.
The replication performance of directors’ dealings after the 2021 German federal election was positive in the short and long-term
- The results indicate that replicating directors’ dealings was successful in the short- and long-term with a simple strategy. Buying stocks for the opening share price of the day that follows the day of the release and holding for 1 month/6 months/until November 1, 2024. This led to average investment returns of 3%/2%/11%.
- The managers’ transactions that occurred between 12-6 months before election day exhibit superior investment returns in the medium and long-term. For a holding period of twelve months, the difference is largest with 27 percentage points versus the directors’ dealings within six months before election day. Fast forward somewhat more than two years – on November 1, 2024 – the gap is still 20 percentage points. These results showcase the importance of timing when purchasing stocks.
- 24 companies are associated with 186 directors’ dealings. 50% of the transactions relate to four companies: RWE (31), BASF (26), SAP (20) and BMW (16).
- 100+ executives relate to 186 directors’ dealings. The top 3 performers with a return of at least 37%/year included Mayree Clark of Deutsche Bank, Sucheta Govil of Covestro and Dr. Michael Müller of RWE
Discover the directors’ dealings for strong investment returns with BOSS STOCKS
The results exhibit a positive performance in the short- and long-term of directors’ dealings executed in the year prior to the 2021 German federal election. In addition, better timing of stock acquisitions can lead to sustained superior investment returns. BOSS STOCKS helps you replicate such directors’ dealings. Free sign up to test the product before market launch.