Mark Hulbert: Insiders have hiked their selling

Mark Hulbert, Author of Hulbert Financial Digest, a newsletter that tracks the opinions of 160 newsletters, points out that insider selling of shares is at the same level now as the fall of 2007. On one hand he points to the fact that insiders are feeling very bearish, and since they are insiders we should listen to their actions. On the other hand, he points out that even when right, insiders are often early. We should still listen - they are more often right.

Corporate insiders have recently been selling their companies' shares at a greater pace than at any time since the top of the bull market in the fall of 2007.

Does that mean you should immediately start lightening your equity exposure?

It depends on whom you ask.

But, first, the data.

Corporate insiders are a company's officers, directors and largest shareholders. They are required to report to the SEC whenever they buy or sell shares of their companies, and various research firms collect and analyze those transactions.

One is the Vickers Weekly Insider Report, published by Argus Research. In their latest issue, received Monday afternoon, Vickers reported that the ratio of insider selling to insider buying last week was 4.16-to-1, the highest the ratio has been since October 2007.

I don't need to remind you that the 2002-2007 bull market topped out that month.

To be sure, the weekly insider data can be volatile, especially during periods like the summer, in which the overall volume of insider transactions can be quite light. That is one of the reasons why Vickers also calculates an eight-week average of the insider sell-to-buy ratio, and it currently stands at 2.69-to-1. That's the highest that this eight-week ratio has been since November 2007.

Read the whole article here.

Source:, July 28, 2oo9

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