Executive Decisions: The Insider Buying Track Record

If you seek the market’s next move, why not ask the CEOs of publicly traded companies? For every $1 of insider stock purchases in August, there was $31 worth of sales, says a report from market researchers TrimTabs. According to the firm, execs at U.S. public companies have been net sellers of $105 billion worth of stock over the last four months. That’s the most aggressive insider selling since the summer of 2007… heh, you know… when most papers were rejoicing “Dow 14,000!”

What’s more, insiders have been spot on so far in 2009. Check out this track record:

Insider Purchases

We admit there’s a lot more going on here than simple market timing. And of course, many CEOs are no better at managing their own money than they are at running their companies (Greenberg, Fuld, Cayne, etc.). Tracking insider buying and selling sometimes does little more than confirm predispositions.

Disclaimers be damned, the numbers don’t lie… insiders have had a stellar track record so far this year, and right now, they are crowding around the exits. Caveat emptor.

The Daily Reckoning