As a follow-up to The Anti-Galleon Model: 4 resources to insider trade -- legally, I just wanted to comment on a NY Times article today by Mark Hulbert called More often than not, the insiders get it right. The article tracks how insider selling tracked during the downturn in late 2008 and how insider buying accompanied the pickup in 2009. Couple of things here:
- Insider selling abated somewhat during a tough January 2010, leading to what some auger as merely a small pullback in the market
- While typically pretty accurate, insiders "failed to recognize the top of the bull market in October 2007, and didn’t anticipate the depth of the decline that followed." (according to Hulbert)
- According to Prof. Seyhun, the axe on insider trading, insiders have been correct far more often than they’ve been wrong, and this is still likely to be the case.