Corporates insiders have an unusually good track record of timing their personal buys/sells. There’s a process around their trades and they do have to jump thru regulatory hoops and various disclosures then they trade their own shares, but looking at what they do with their own money is an interesting exercise.
What are corporate insiders doing now? Buying….and buying at the fastest pace since 4Q2018. There have only been five other times in the past 12 years that corporate insiders were buying so much:
Summer 2010:
After the “Flash Crash” sent the equity market down -15% over six weeks
September 2011:
After the US debt lost its AAA rating and the equity markets had already gone down -20%
1Q2016:
After oil collapsed and after the equity market had already gone down -20%
4Q2018:
Fed chair Powell battles inflation that doesn’t exist, and after the market already down -20%
2Q2020:
COVID…..enough said
Investor sentiment at generational lows and corporate insiders buying……..interesting.
Richard Barrett
Chief Investment Officer
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