I liked Joshua Brown’s Insider Buying/Selling: The Collected Wisdom of a Thousand Heartbreaks (see it also posted at the CSMonitor with the toned-down title: ‘Debunking Myths…’)
There has been a lot of talk during this rally that the insiders — in the aggregate — were selling stock all the way. The Pragmatic Capitalist has done a good job following this trend of insider selling. In Brown’s piece, he lists 10 things he learned about insider trading — all gross generalizations, but interesting nonetheless.
2. Technology executives would rather be locked in a dark basement, listening to Billy Joel’s Uptown Girl on an endless loop, than make an open market purchase of their own stock.
9. I avoid the stocks of executives who go on TV and speak promotionally while dumping larger-than-normal blocks of their own stock. This is because I’m street smart and Street smart. It’s not always the right thing to do, but I sure feel better.
As I’ve written repeatedly here and in my book due out in June, insider buying/selling is more useful when trying to size up individual stocks than the market in general.