The insider selling statistics continue to represent an almost unbelievably low level of confidence by insiders in their own companies. The latest data out of Finviz showed an incredible $837MM in insider selling compared to just $13MM in insider buying. While we try not to read too much into the extreme amount of insider selling (insiders sell for many reasons that don’t always represent a lack of confidence in future prices) the drop-off in insider buying is quite alarming. Insiders only buy their own stocks for one reason: they believe the stock is going to rise. The total lack of insider buying can only be seen as a widespread vote of no confidence in the future prices of U.S. stocks. Although the selling data should be largely ignored, the incredible amount of sales has to make one wonder how much of the selling is due to insiders who simply want to cash out of stocks before they decline again….
The following chart from insidercow.com shows the sharp drop in the insider buying:
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Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.