Get Me Out!

In today’s investment world which is teeming with bullish participants there’s at least one group who is leery of all the feverish buying: company insiders.

Insiders are selling 50% more intensely than they were at the December 2019 peak and at triple the rate at the February [2020] top in stocks. Like the Commercials in the commodities markets, they tend to be right.

This chart shows this one cohort of shareholders that is not fully embracing the market’s rally.

Corporate insiders sold 7.8 times as many shares as they purchased in the first two weeks of January. As the chart shows the sell-to-buy ratio is easily more extreme than at any time since 1990.

You may be asking: If corporate insiders “tend to be right” about the market, why haven’t the main indexes already cratered?