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EnigmaDude (50.86)

Insider Transactions Ratio as a market indicator



November 23, 2010 – Comments (6) | RELATED TICKERS: REXX

According to Barrons, the ratio of insider selling vs buying took a substantially bullish turn this week.  The trend had been getting rather bearish, as another popular blog post recently pointed out.  Personally, I have more faith in the editors of Barrons/MarketWatch/Smart Money/WSJ than some of the other sources of this data that are out on the web.

And it is not suprising to me that some insiders would be taking profits before the end of the year, especially with the lingering uncertainty surrounding the pending expiration of the Bush tax cuts.

I am personally using this latest market correction to add to my long positions, which include some silver and gold miners as well as tech stocks.  I think there are some nice candidates in the energy sector right now as well, which I believe will soon rotate back into favor with investors.

6 Comments – Post Your Own

#1) On November 23, 2010 at 1:03 PM, djemonk (< 20) wrote:

+1 Rec for thinking something through before posting

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#2) On November 23, 2010 at 1:35 PM, Valyooo (33.03) wrote:

Insider selling means nothing, insider buying means something. Insiders sell for a million reasons (divorce, spending money, diversification, children, new house, law suits, etc), they only buy because they believe the company will do well.

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#3) On November 23, 2010 at 1:42 PM, truthisntstupid (87.32) wrote:

Rational people do exist!  I knew it! 

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#4) On November 23, 2010 at 2:19 PM, EnigmaDude (50.86) wrote:

Thanks for the comments. We are all here to learn from each other (and sometimes just to amuse one another).

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#5) On November 23, 2010 at 6:57 PM, Momentum21 (97.96) wrote:

Agreed...every indicator presented by some talking head is always put out there to sell his/her bias one way or another.

Most of the true facts are baked...

It's hard to buy on a day like today. And harder if your purchase goes deeper under tomorrow...sticking to a pre-determined plan and cutting through the emotion is critical.  

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#6) On November 28, 2010 at 9:53 PM, OneLegged (< 20) wrote:

I would argue that when viewed at a macro level insider selling does indeed mean something.  Not all "insiders" can have a divorce (etc) during the same time period.

 Also, sticking to a predetermined plan only makes sense if the plan is a sound one.

 Excellent post and excellent comments. +1

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