Thursday, November 11, 2010

"TrimTabs: Ominous Inklings Of 2000, 2007"

From Barron's Stocks to Watch Today blog:
In an interview by phone this afternoon, Charles Biderman with TrimTabs Investment Research, who is himself a Barron’s alum of the 1970 to 1973 vintage, expanded on some thoughts I referenced from his research report earlier today, to wit, there are some serious bearish signs in recent insider selling.

Taking the $17.6 billion headline number of insider selling in the last 60 days, Biderman says he’d leave out the last few days, for which data is somewhat questionable. But evening trimming the number, he comes up with $16 billion in insider selling in the 60 days through November 3rd. The last time selling was higher than that was when it hit $20 billion in October-November of 2007.  October 31st, the S&P 500 index hit an intraday high of 1,576.09 and proceeded into a deep downturn.

“Typically we look at insider buying and selling as an indication of sentiment,” says Biderman. “But $16 billion is not just an indicator, it’s real money!”

Among the ominous signs of late, asset manager BlackRock’s (BLK) $10 billion secondary offering this week, and the spate of dealmaking in energy, healthcare, and tech. That kind of mega selling of shares and trading of assets reminds Biderman of August 2000, the all-time market peak, when Credit Suisse (CS) said it would purchase Donaldson, Lufkin & Jenrette. 

I asked Biderman about the fact that a lot of firms seem, however, to have announced big, big buyback plans of late. “I would say we started to see a pickup in buying in October, after September seeing net selling,” says Biderman....MORE