The Golden Truth: An Avalanche of Insider Stock Selling

Thursday, August 13, 2009

An Avalanche of Insider Stock Selling

What's the "message" of the market here? Over the last two weeks corporate insiders have dumped over $2.1 billion in stock vs. $73.1 million in buys. I'm not sure I've ever seen the ratio of insider sells vs. buys this skewed toward officers and directors looking for the exit door. Talk about the captain jumping into the lifeboat and speeding away before the ship sinks....

Given that the trailing, "as reported" price/earnings ratio is now 144, or substantially above the peak p/e ratio on the Nasdaq at the top of the tech bubble, what is the market trying to tell us?

Think about that when you call up your financial advisor or broker and tell him you want get out of the stock market.

5 comments:

EconomicDisconnectThursday, 13 August, 2009
Whenever this kind of insider selling gets attention, you get the same old excuses:
-tax reasons for selling
-diversification

But the reality is when insiders are dumping like they are now it almost always marks a top. Great stuff.
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EconomicDisconnectThursday, 13 August, 2009
Forgot to mention this item;
from the always fun "Mogambo Guru", a missive on why the US government has no need to confiscate your gold:
http://dailyreckoning.com/why-the-government-doesnt-need-your-gold/

I may post on this tonight, but a fun read.
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Dave in DenverThursday, 13 August, 2009
I would agree on the excuses thing except that the insider selling has been extraordinarily high every month since April. There is some merit to diversification. No merit to tax selling at this time of year.

There's no question, especially in relation to the very small amount of buying going on, that insiders are fleeing Tokyo before King Kong crushes everything.
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EconomicDisconnectThursday, 13 August, 2009
Godzilla and King Kong combined!
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janeMonday, 09 August, 2010
I wanted to thank you for this interesting I definitely loved every little bit of it. I have you bookmarked your site to check out the latest stuff you post.

finance
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Add comment

Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.