Corporate Insiders Embark On A Buyers’ Strike – Investment Watch

by jessefelder

This post is an excerpt from a report recently featured on TFR Premium.

While the typical investor continues to pour money into the equity markets like there’s no tomorrow (aka, a reckoning for the the whole lot bubble), corporate insiders are notably doing just the alternative. In 2021, equity inflows hit a brand new, all-time record. 2022 saw the third biggest amount of cash put to work within the broad stock market during a calendar yr. Insiders, after all, did just the alternative. In 2021, they sold record amounts of stock (data via And while their selling did abate some last yr, it is crucial to notice that they’ve not stepped in to purchase, as they’ve done at essential lows within the recent past, in any meaningful way in any respect.

“The thing that stands out straight away is the shortage of shopping for despite the fact that prices have come down a lot. That’s type of a warning,” Nejat Seyhun told the Wall Street Journal last week. No one I do know of has done more extensive work on the subject of insiders than Seyhun, professor of finance on the University of Michigan. Months ago, Seyhun told MarketWatch’s Mark Hulbert, that tech insiders were actually still selling into the stock market decline, “perhaps essentially the most bearish thing insiders can do.” Just have a look at what Tesla shares have done within the midst of Elon Musk’s persistent selling to see how this works out.

Retail investors, even passive ones who dogmatically consider market timing is solely impossible, could be smart to follow the lead of insiders like Musk & Co. whose bearish actions speak far louder than their mostly Pollyannaish words. Because while insider buying did pick up early last yr it was greatly skewed by Dustin Moskovitz’s apparently non-economic buying of $1 billion of Asana shares which have lost him a cool $800 million thus far. Outside of that, there is absolutely no sign of insider enthusiasm in aggregate in any way. So while investors are acting as if that is one other opportunity to BTFD, similar to 2016 and 2020, insiders are sending a really clear message that this time is different.

Leave a Comment

Copyright © 2024. All Rights Reserved. Finapress | Flytonic Theme by Flytonic.