Just two week’s ago with the market at 1300, insiders couldn’t get out of the market fast enough. The Vickers Insider trading report showed its highest levels of insider selling since 1974. After a vicious two week sell-off, the tables have turned. The latest weekly reading is the most bullish data point since 1998. Ed Yardeni mentions the turn in his latest update:
“Corporate insiders remain bullish on their companies. According to Vickers Weekly Insiders Report: ‘With market volatility increasing last week, corporate executives and directors have seized the opportunity to increase their holdings. Insider sentiment has not only turned solidly bullish, but insiders have become significantly more active–with the number of buy transactions tripling when compared to a week ago. Rising activity among insiders is common as we exit earnings season, though a 7.5-fold increase in buy transactions over two weeks and a 16-fold increase over three weeks cannot be attributed simply to restrictions placed on insiders during the reporting period. Not only has the number of purchases risen, the number of reported sales fell last week.'”
It’s never wise to read into one data point too much, but I think it’s safe to say that this is one notch for the bull argument.
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.