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  • bakedinalready bakedinalready Feb 8, 2013 3:25 PM Flag

    Duy: Insider Selling 9.2 to 1-Mark Hulbert/CNBC

    Duy,I don't make this stuff up. Search CNBC. You will find it. This is from Mark Hulbert
    "corporate insiders becoming aggressively bearish at an alarming pace according to editor of the Hulbert financial digest. ratios are interesting but 9.2 to 1, that will get your attention. what is going on? that is the ratio last week of all the number of their insiders sold of their companies to shares that they bought. it is a ratio that a number of people have been tracking for decades. the data i'm reporting in the column is august research. an alarming number. to be affair, almost as an alarming in late december, the market continued to go up. some people willing to discount the high number we saw in december as insiders accelerating their sales to beat the tax increase. now we don't have that way of dismissing this it looks like insiders are not betting that prices are going to be going higher any time soon. dynamics in december involved policy risk, year-end tax issues. do you think, now we are in speculation mode, but is that reason for selling still the issue or changed to something more macrobased? it is speculation based. it is a data point that reflects the individual behavior of thousands of different insiders. mark, you raise a very important point, not all the indicators are as rose say the headlines demonstrate. many markets are negative for the year overawful and bear in mind other asset markets fallen in the year. what interests me about the insiders is, across the macrosituation, you have everybody's individual lifestyle and lifecycle overlaid. very often, people who have risen to the top of their careers, they see the markets of 52-week highs or five-year highs and they will, therefore, sell for their own reasons, very different from the question as to whether a 32-year-old who has excess cash should perhaps enter the market. that is a very good point. indeed, the researchers who have looked at insider behavior probably put more importance on insider purchase than saturday it doesn't necessarily have anything to do with whether the stock prices are overvalued. the same token, an insider is selling now and otherwise thinking that the price of his stock -- his company something is going to be higher in a month or two presumably they could wait. the other thing to point out you can as recently as the low point is the market threat last fall, the ratio was down actually below they see opportunity or lack thereof in the market. bears trying town earth all reasons why this rally should be suspect. insider selling, short interest divergence of the russell, the divergence of corporate high yield, do you believe these things add up to something? yes, worth pointing out that in fact even though this is just one indicator, talk about it as one indicator, what insiders are doing, it reflect the behavior of thousands of insiders each one of shop looking at the circumstances of his or her company. i think it ends up being a quite a compelling indicator, one insider saying i don't think my company is going to go up the next month or two i will sell t another one different sector or industry all together is making that same determination it is a sensitive barometer of the economic prospects across the entire spectrum. does sort of equalize whatever is unique about their individual situation, doesn't it? that is right.
    indeed the patterns do even though there are a lot of microbehaviors that are added up, it adds up to a very compelling overall macroindicator.

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    • Goes back to what i was saying yesterday...

      Anyhow, next week AAPL should break through 500, ill sell my calls and day trade it out.

      With the exception of HA (because oil is drifting lower, thanks for the alert, Duy)
      and DGAZ, my 401K is all in cash...

      I also have JO, but i dont expect much craziness on it with this decline coming.

      • 2 Replies to johnson4730
      • Johnson,

        Sorry, I may misunderstand your message when you said "thank you".

        As far as HA, I lost $1.5K on the lots I bought before the drop. But I was able to capture the day that people sold it at ~5.34. So, I don't think it would be right to say no problem if you entered before the drop. It was not a good call.

        Take care,
        Duy.

      • Johnson,

        no problem my friend. I did trade SCO the last few days and captured a few gains. You know the US gov will bring oil down when it get closed to $99/br.

        So, we are about 2% from that number. So my odd is very good when oil gets to $97-98/br, I buy SCO.

        Take care,
        Duy.

    • Baked,

      I don't trust any thing Mark H said. I spent the last 30 minutes to read all of the things he wrote. Learned to find out the guy has been bearish since Oct 2012. He called the market top many time in the last few months. Well, it was since he called Is Bull Market Near End of Its Life? - Barrons dotcom in Oct 2012.

      Well, the DOWJ was up 3000 points. Do you know how much people lost listen to his call?

      Take care,
      Duy.

    • Baked,

      Wow. This is more aggressive since last Friday? I will verify that data and see if Mark H.has inflated the number or not. Any way, thank for sharing it. I was looking at the 1 month report insider buying vs selling. We will verify the info.

      Take care,
      Duy.

      • 1 Reply to duydinh_t
      • I just looked at data (just now). The report on Jan 31 which was the Friday that Mark H was talking about.

        The insider selling vs buying is 3.5 vs 1. And that is the fact. I don't know where Mark got his number 9.2 vs 1. You have to understand that Jan 31 is the property tax month. I paid my tax on the last day of the month and I know many people do the same things. People need to pay tax, credit cards after holidays. etc. I don't think we use the last week of Jan selling as a fair indicator. Well, that is my opinion on this.

        Take care,
        Duy.

 
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