Following up on this morning's "Straws in the Wind: "Insiders Buy Stocks at Highest Rate Since 2009".
I should make it very clear that neither of the parties in the instant case is Michelle Triola Marvin.
That there is, in fact, no case. The parties may not even be aware of each other's blogs.
Actually they are not parties to anything. There is no party.
They do however look to be mushrooms [fungi's- fun guys-he thinks it's clever-ed]
First up, coming off the top rope, The Reformed Broker:
The Insider Buying Lie
I'm busy with a massive rebalance today, nibbling at equities after a 15% decline and some minor bond trimming to get my core accounts back to their weightings. That said, I did want to take a moment to put this out there...[you have lost your mind -ed]
One of the dumbest syllogisms in all of investing goes like this:
Do me favor and trust me on this, in my retail broker days I used this syllogism to brutal effect - it is an utterly unstoppable weapon for those in the business of selling stocks, it cannot be disagreed with.
- The insiders are buying their own stock
- Insiders know more about the prospects of their own companies than anyone else
- Therefore, I should be buying the stock along with them
Today will you hear the following insider buying statistic a multitude of times, mostly from long-only mutual fund managers or buy-and-hold asset gatherers who are attempting to soothe the markets (and their investors)...MORE. including thesis, antithesis and synthesis.
And, wearing the slightly too tight Captain America uniform, Economic Policy Journal:
Is the Insider Buying Significant?
Since posting on the recent insider buying, I have been deluged with emails pointing me to a Zero Hedge comment on the insider buying as insignificant, primarily for two reasons:I repeat, neither blog is flaming the other, I am juxtaposing.
1. The absolute size of the buying is small (roughly $20 million)
2. The size of the buying relative to selling is small.
Here's the thing, ZH makes it out to be a size problem, and while I agree size does count in many things, it doesn't when it comes to insider buying.
The thing is 66 insiders at 50 companies bought shares between Aug. 3 and Aug. 9, the most since the five days ended March 9, 2009, when the benchmark index for U.S. equities reached a 12- year low.
These aren't the CEOs at these companies buying. The CEOs already have their stock positions and stock options. These are the little guys at the companies (That's why the total dollar amount is low) and those are the ones you want to watch....MORE
And neither called the other a "Swamp sow". (Transcript)
Here's Weekend Update: