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Insider trading activities (SINLetter) — August 8, 2010

Asif Suria has done great work over the past couple of years.  Check out what he does at SINLetter.com.

He publishes an Insider Weekend which runs down insider buying/selling trends (a Tradestreaming hallmark) and highlights specific names that are seeing significant insider activity. Here’s the current installment.

Insider buying increased once again last week with insiders purchasing $21.82 million of their stock when compared to $13.42 million in the week prior. Selling also increased with insiders selling $821.45 million worth of stock when compared to $498.22 million in the week prior.

Suria compares buy/sell ratios to previous weeks’ activity:

The adjusted ratio for last week dropped once again to 21.82. In other words, insiders sold almost 22 times as much stock as they purchased.

On the notable buy/sell side, Suria calls out activity in Akamai (AKAM), Ford Motor (F), and Herbalife (HLF) among others.  Check it out.

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Insider buying trends (SINLetter.com)

Asif Suria has done great work over the past couple of years.  Check out what he does at SINLetter.com.

He publishes an Insider Weekend which runs down insider buying/selling trends (a Tradestreaming hallmark) and highlights specific names that are seeing significant insider activity.  Here’s the current installment.

Insider buying rebounded last week with insiders purchasing $13.42 million of their stock last week when compared to just $3.4 million in the week prior. Selling picked up pace with insiders selling $498.22 million worth of stock.

Suria compares buy/sell ratios to previous weeks’ activity:

The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 98.64 (51.13 without the AutoZone sales).

On the notable buy/sell side, Suria calls out activity in Blackrock (BLK) and Eagle Bancorp (EGBN) among others.  Check it out.

—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers.

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How to make Betterment better (Hint: truth in marketing)

Sometimes, it’s worth reading the fine print — especially, when it comes to financial products.

I was interviewed by Mint.com recently about my thoughts on Betterment, a startup that performed pretty well at recent tech conference, TechCrunch Disrupt (see, Betterment wants to be your new, higher-yield savings account).

What is Betterment?

Well, it’s really an investment advisory service that masquerades as being a better savings account.  By removing much of the jargon (the site doesn’t even mention securities by name), Betterment removes many of the barriers to putting money in the market.  As I said in the Mint interview:

For most people, opening an online trading account and figuring out what to buy and who to listen to, there’s so much noise out there.

And that’s true: how many individuals really understand asset allocation, diversification, risk when professionals have such a hard time defining them?  It’s kind of like I know it when I see it.  Betterment provides a usability layer that requires only one decision point: what percentage of my money do I want in the market?  That’s it.

Removing the confusing jargon and the pain points associated with complicated concepts is ultimately a good thing.  I can just picture my grandparents trying to navigate an E*Trade account trading screen.

Oops, it’s not actually a bank account

While pursuing a noble end (making investing easier for the mass majority), Betterment stumbles when it positions itself as an alternative to a savings account.  It is most definitely NOT a savings account.  Money in Betterment is split between Exchange Traded Funds (ETFs), one of which will include U.S. Treasury Bonds if you allocated to that.  That means, an account holder

  • risks losing some, if not all, his money
  • will see fluctuations in the account
  • will have investment-level taxes on gains

I was quoted in the interview:

“They took a process that’s inherently scary and overwhelming for people and used technology to simplify it,” says Miller. “I think that’s an honorable thing. But to market it again and again, to talk about a savings account, is just disreputable. It’s scary, actually.”

Though it appears that they’ve toned it down recently, there’s still just too much talk/discussion on the Betterment website about safety and savings.  Betterment may be a great product to *invest* spare cash just sitting in a savings account (much like ShareBuilder used to be).

Just don’t compare it to the savings account.  At 90 basis points (.9%), it’s also expensive.

—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers.

Source

A Better Savings Account? (Mint.com Blog)

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Resources about stock buybacks

Stock buybacks, whether you like them or loathe them, are a reality and when companies are sitting on so much cash (like they are now – almost $1 trillion!), buybacks are certainly one option for companies looking to deploy their cash hordes.

Barron’s recently reviewed a few online resources to help investors stay on top of macro and company-specific trends.  You should read the whole article (sub. required).

Here are a couple of their ideas and some of my own thrown in to boot…

Stock buyback resources

  • S&P Indices Market Attributes Series — I’m not exactly sure of what that means but this page posts proprietary S&P reports into buybacks.  Good overview on their reports (like this one (.pdf))
  • The Online Investor: OLI does a good job of reporting all the buybacks in the market on a per-company basis.
  • StreetInsider: Ongoing free feed of stock repurchases at numerous U.S. traded companies.
  • Seeking Alpha transcript search: Seeking Alpha publishes thousands of free conference call transcripts.  Search for terms like “stock buybacks” or “share repurchases” and get a list of which companies are talking about them and what they’re saying.

Academic studies of share buybacks

Premium Newsletters using Share Repurchase Strategies

Funds using buyback strategies

  • PowerShares Buyback Achievers Portfolio ETF (PKW)

Read the whole Barron’s article here (sub req’d).

—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers.

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Video Review: Trefis

Trefis.com is a great site to model up technology companies. There are some great tools — some analytical, some social, that allow investors to play around with growth/profitability assumptions to forecast a stock price.

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What is Tradestreaming: Crowdsource your Portfolio

The wisdom of the crowds has been used to better predict world events, elections, and the outcomes of sporting events. It’s now being used for more accurate forecasting of stock prices. Instead of following experts, crowdsourcing investment ideas seeks to assess what the masses think about a specific stock. The crowd is frequently more accurate in its predictions than top analysts?.

Enter Social Media

But with the onslaught of investors publishing their thoughts on stocks and the market on Facebook and Twitter, it’s hard for investors to monitor all the noise. Determining what the crowd thinks about a specific investment is tricky. Therefore, we’ll also explore different ways that investors can effectively plumb the wisdom of the crowds to build a portfolio populated with stocks the crowd thinks are going up.

What if there was a way to leverage the collective knowledge of all investors out there and use it to make a profit? What if you could build a portfolio that took investment ideas from the throngs of day traders and couch-potato investors, firemen and police officers, lawyers and doctors—a population of millions of investors? Figure out where the herd mentality thinks profits are and damn the experts.

Tradestreaming is that way.

<– Previous: Following the Insiders I Next: Screening 2.0 –>

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Top Warren Buffett resources

Warren Buffett is an investing legend to almost 3 generations now.  Here’s the best way to learn from and about Warren Buffett.

About Warren Buffett

Wikipedia: Warren Buffett: everything you wanted to know about Buffett, the Oracle of Omaha
The Snowball: Warren Buffett and the Business of Life (book): written by Alice Schroeder, former director at Morgan Stanley, hand-picked Buffett biographer

Buffett on Forbes’ Richest People list

About Buffett’s investment strategies

Berkshire Hathaway’s shareholder letters: Go to the source for inside understanding of how Buffett looks at his own business and investing in others

MarketFolly: Buffett’s portfolio: Monitor the ins-and-outs of holdings in Buffett’s investment portfolio

Buffettology: the previously unexplained techniques that have made Warren Buffett the world’s most famous investor (book): Perhaps the best of the Buffett books, Buffettology is a great resource for investors to learn how Buffett values companies, complete with formulas

Buffett Beyond Value: Why Warren Buffett Looks to Growth and Management When Investing (book): With Buffett Beyond Value, you’ll learn that, contrary to popular belief, Warren Buffett is not a pure value investor, but a unique thinker who combines the principles of both value and growth investing strategies.

Warren Buffett Resources

CNBC channel on Buffett

GuruFocus’ tracking of Buffett’s investment holdings

Validea’s Buffett Portfolio: Screening for Buffett-like stocks and performance

Videos


Buffett takes heat on ownership of credit rating agencies.


Warren Buffett speaks to a class of MBA students.