Comments on: INSIDERS STILL NOT BUYING THE RALLY

By: dictionary

dictionary — Tue, 27 Oct 2009 15:19:29 +0000

Perhaps they are selling their stock to pick up ever cheaper real estate. Thats what I am doing with my AAPL options and shares gained at Apple, especially as they were just at an all time high and Real Estate is getting more reasonable.

By: BleakoEcobamics

BleakoEcobamics — Mon, 26 Oct 2009 15:49:14 +0000

> what if what we are seeing is the liquidation of stock holdings purchased on margin, or with the help of corporate loans

I think that is not likely the case. Corporate loans for officers have gone the way of the dodo, and there is really no need to buy company stock on leverage. These are *insiders* or typically section 16 officers who are paid in gobs of equity. They would not need or typically desire to lever up for more on an already overweighted portfolio.

By: W

Mon, 26 Oct 2009 14:24:14 +0000

Let’s put aside the very low purchases for a minute, if we assume the uncertainty of the economic landscape explains a ‘hold’ strategy.

One would expect sales to also be on hold in this context.

But what if what we are seeing is the liquidation of stock holdings purchased on margin, or with the help of corporate loans. I think the practice may have been much more important than is publicised. Those sales would therefore be less a reflection of business prospects and more a liquidation process of hot money. We could imagine those directors selling their debt financed holdings as soon as the price of the shares reach the holdings breakeven point.

Worth a thought?