Posted on 09/10/2009 2:20:20 PM PDT by Signalman
NEW YORK (Fortune) -- Can hundreds of stock-selling insiders be wrong?
The stock market has mounted an historic rally since it hit a low in March. The S&P 500 is up 55%, as U.S. job losses have slowed and credit markets have stabilized.
But against that improving backdrop, one indicator has turned distinctly bearish: Corporate officers and directors have been selling shares at a pace last seen just before the onset of the subprime malaise two years ago.
While a wave of insider selling doesn't necessarily foretell a stock market downturn, it suggests that those with the first read on business trends don't believe current stock prices are justified by economic fundamentals.
"It's not a very complicated story," said Charles Biderman, who runs market research firm Trim Tabs. "Insiders know better than you and me. If prices are too high, they sell."
Biderman, who says there were $31 worth of insider stock sales in August for every $1 of insider buys, isn't the only one who has taken note. Ben Silverman, director of research at the InsiderScore.com web site that tracks trading action, said insiders are selling at their most aggressive clip since the summer of 2007.
Silverman said the "orgy of selling" is noteworthy because corporate insiders were aggressive buyers of the market's spring dip. The S&P 500 dropped as low as 666 in early March before the recent rally took it back above 1,000.
"That was a great call," Silverman said. "They were buying when prices were low, so it makes sense to look at what they're doing now that prices are higher."
(Excerpt) Read more at money.cnn.com ...
How will Jack Van Impe interpret this?
/ sarcasm
It looks fairly simple. It appears they have gotten the market back up to where they can make a buck and they are bailing out while the bailing is good before those other investers get stuck.
I’ve been reading for over two months now how mid- to late-September a serious of major crunches are going to hit like a ton of bricks. And it won’t be mostly in the stock market. Likely it will begin with a whole bunch of zombie banks that just cannot hold out any longer.
Lots of business mortgages are coming due, with no possibility of refinancing, and when they go, likely the national pension funds will get hammered. If too many banks go at once, there will almost have to be a bank holiday, and that may cause a run on the banks.
And come October 1st, it is a new federal fiscal year, and a vast amount of new regulations come into effect.
Cheers!
You might try moving to some of the tax free municipal funds. If you’re prior service military, USAA offers some dynamic ones.
http://biz.yahoo.com/p/fam/usaa_group.html
5.5% tax free yield is nothing to sneeze at. Jimmy Carter foolishly offered to raid the muny funds, and every city and State in the US told him hell no, and in impolite terms.
Cheers!
That’s a good question for a tax accountant. However, tax deferred is still at the beck and call of people who want to change the rules, and not to your benefit.
This goes back to what I said about Carter being burned for trying to tap into municipal bonds—even if Obama tried the same idea, it would have the same result.
But the see IRAs and other deferred tax accounts as money just waiting for them to steal. There is nobody on your side to protect your interests.
Do dead cats bounce nine times?
Eventually, they stop.
Could get ugly.
Hey, but isn’t the O’Messiah gonna tell us everything we need to do to get rich next Monday?
Probably have something to do with the Amero...
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