Posted on 09/08/2009 7:04:53 AM PDT by BGHater
Any time corporate executives and directors are heavily selling their company's stock there's reason for concern. And lately they've been doing just that.
The last time insider selling was as high as it is now was in the period from late 2006 to late 2007. It was right after that insider-selling surge that the stock market began its long painful decline, says Charles Biderman, CEO of TrimTabs, an independent institutional research firm.
Biderman believes that insider trades shoot higher when there's a disconnect between broad market opinions and what business executives feel in their gut. "When [insiders think] things are going better than most people think, they buy stock," he says. "When things are going worse than people think, they sell."
That's to say, insiders have no crystal ball but they often have access to up-to-the-minute sales data as well as firsthand impressions from their sales managers — and that gives them an inside track on what's happening in the economy. When this special access leads them to be big sellers of their stock, well, it's a vote of no confidence in their employer's near-term future.
Biderman has measured the ratio of insider selling to buying since 2004, and says historically the ratio is 7 to 1. (Insiders almost always sell more than they buy because they receive stock as part of their compensation.) Right now the ratio is 30, one of the highest he's recorded. November 2007 is the last time the ratio even came close, at 24.
The big rise in insider selling, which developed over the past several weeks, signals a time for caution, not panic, says Jonathan Moreland, analyst at InsiderInsights, a stock-market advisory service. "The insiders are telling me, O.K., there's a yellow light now; the green light is off," he says.
(Excerpt) Read more at time.com ...
They know they’re on that plane in the Bug’s Bunny cartoon that’s heading straight towards the ground, only they know they won’t be saved at the last minute because the plane ran out of gas.
What about the AIR Brake!
Because the market is about to crash.
Disclaimer: I am heavily invested in it doing so.
Because people with access to the financials know that the bubble is about to pop. A lot of companies are being kept alive by no-bid government contracts. If either (1) the government spending slows down or (2) Obama has the fed monetize the bonds, causing hyperinflation or(3) the GOP takes over in 2010 they are dead. Since avoiding option 1 almost certainly leads to either 2, 3 or both they are getting out while the getting is good.
Can we say Bankrupt the Country, YES WE CAN!
Well, at least this crash will be televised.
Any time corporate executives and directors are heavily selling their company’s stock there’s reason for concern. And lately they’ve been doing just that.
As one of my newsletters said, when they are buying, you know exactly why, they think it will go up. When they are selling there may be a variety of reasons, one of which may be things are rotten but there are also many personal reasons why they may sell.
Of course, more in line with the Bush tax cuts ending?
Of course, more in line with the Bush tax cuts ending?
Gold over $1K also... the trend(s) continue...
Maybe business owners fear the government’s cooking the numbers...
This isn’t rocket science. I started shorting banking, mortgage companies and home builders in 06. My first short was Countrywide, as the CEO dumped 100 million of his own stock, and I knew that they were writing mortgages for anyone who could fog up a hand-held mirror. John Paulson, of Paulson & Co. is “The King of Shorts” and made 3.7 BILLION in 2007. Compared to Paulson, I was a piker ;-)
“Maybe business owners fear the government’s cooking the numbers...”
LOL! They KNOW the govt. is cooking the books.
(s)...and 9.7% is the real unemployement...(/s)
Obama speaks, the market drops.
After tommorrow all the amatures will panic and bail. I expect by friday the speculators will be rushing to the doors.
Yep. And I’m a monkey’s uncle, and the son of a sea cook ;-)
Because they are turning their paper money into tangible goods they can use.
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