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American Capital Agency Corp. Message Board

  • gene4346 gene4346 Jun 27, 2013 11:23 AM Flag

    Insider Buying AGNC

    I like the statement made by the author in yesterday MF article about insider buying at 3 companies (including AGNC) - "It's like they say, insiders sell stock for many reasons, but they buy for only one." Good sign for AGNC and us longs...............

    Sentiment: Hold

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    • Don't read too much into that. I have seen a lot of dumb insiders buy their own stock at prices that they never reach again. These guys can get just as emotional as anyone else and do things that an unvested person would never do.

      For example, a person who owns a stock that has declined in price might buy more thinking that averaging down is a rational justification even though this is completely illogical as it would make more sense to take the loss on a stock that is trending down and buy a stock that is trending up. They do this simply so they can avoid the negative emotions associated with a loss but if they took the loss and used the money to make a gain on another stock that is trending up they could be further ahead. It is basically investment by emotions and it doesn't work as well as investing without emotions. Holding or buying more for the sake of loss avoidance is one of the biggest mistakes an investor can make. Most experienced investors, assuming a certain amount of intelligence, won't do this.

      Of course some never get it and never will. They pick a losing formula and keep using it again and again never realizing that it is causing them to do worse in the long run because they never analyze the situation accurately enough to realize what they have actually done and how they might have done better. They just keep making the same mistakes over and over often thinking that they are doing good. Of course everyone does a little of this as no one performs at 100% optimum. It is a matter of degree. It is just that some are clearly so wrong it is obvious to anyone who has seen those strategies fail so many times in the past usually for reasons that the person using them has not even considered. Like this assumption that a stock always rebounds when many times they never do. There are so many stocks that are selling at much lower prices today than they were in the 90s. You would think it would be lesson but it is as if it never happened.

    • Also note,
      as a general rule, the MF is nothing but a huge add for the #$%$ service.
      (Yes, I got it one year, all I basically got as adds for the next level up service).
      Take it with a grain of salt.

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