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INSIDER SELLING SPIKES TO NEW HIGHS, BUYING STILL NON-EXISTENT

1 September 2009 by Cullen Roche 4 Comments

The insider selling statistics continue to represent an almost unbelievably low level of confidence by insiders in their own companies.  The latest data out of Finviz showed an incredible $837MM in insider selling compared to just $13MM in insider buying. While we try not to read too much into the extreme amount of insider selling (insiders sell for many reasons that don’t always represent a lack of confidence in future prices) the drop-off in insider buying is quite alarming.  Insiders only buy their own stocks for one reason: they believe the stock is going to rise.  The total lack of insider buying can only be seen as a widespread vote of no confidence in the future prices of U.S. stocks.   Although the selling data should be largely ignored, the incredible amount of sales has to make one wonder how much of the selling is due to insiders who simply want to cash out of stocks before they decline again….

The following chart from insidercow.com shows the sharp drop in the insider buying:

dailyBuy

insidersales

Click for larger image

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Comments
  • Paul

    Paul Tudor Jones, macro manager is taking bearish stand-http://bloomberg.com/apps/news?pid=20601087&sid=auGWGWlnohNo

    09/01/2009 at 1:58 AM
  • VCC

    Great find, Paul! Thank you!

    09/01/2009 at 7:48 AM
  • Sherman McCoy

    While common sense and your website yells loudly, “sell,sell,sell!” I can’t help but wonder about the fact that anybody who sold after the October gap has a loss, and is probably regretting that decision. I’m also wondering about all those investment committees that are faced with underperfomance due to large cash/bond allocations. More than a few portfolio managers will get fired(or lose a lot of assets) if they remain defiant. As the old Wall Street saw goes, “bull markets climb a wall of worry”. This one is probably no different.

    09/01/2009 at 8:58 AM
  • Cullen Roche TPC

    The wall is 50% high so far. How high do you think this wall is? That is the most important question….

    09/01/2009 at 9:00 AM