So I always get bemused when market commentators try to spread fear because insiders are selling. This really is a totally stupid metric 97% of the time. And the commentators that discuss this metric, well in my humble opinion are not worthy. So let's explore this...
First up, insiders are human, they have to pay taxes and other bills like the rest of us. But they generally get stock bonuses if they achieve certain milestones, and woops, that's a huge amount of extra income, and obviously the tax department has their hand out. Could be a tax bill for $300,000 give or take if you got a million worth of stock bonuses. So you have no choice, gotta sell some stock.
Maybe the super yacht blows an engine, or your daughter gets engaged, or you find a cute little mansion in Tuscany, or you watch a you tube video on the plight of pussy cats in Guatemala and decide to donate a few million to the cause.... doesn't matter.
Don't speculate, just ask the CEO why he or she is selling. And I bet they will tell you. Maybe not the details, but cause I had to pay for shit is a good enough reason.
If the CEO is a con man, then heck yes he's selling cause the stock is about to tank. But if you did your DD then you would not be in that stock, so you don't care.
All I'm saying is that there are many valid reasons why insiders sell, and only one highly unlikely reason. So frommy emotional investor lense, it's not a valid metric.
Oh and since I was once a Boy Scout, and love badges, I've shared my badges below. Just cause I kinda think what I say is backed up by my performance. I am not a sheep, I do not follow the nonsense of Wall Street. And CEOs selling is nonsense. But buying, hmmm that's different. If they are buying I'll be buying too
Happy trading tigers
Comments
I agree with your pointer - Always do DD. Paramount importance. [Cool]
Have a beautiful Sunday. Cheers🍻