Go to Jeff Salisbury LWGate Home Page.From: "David Taggart" <dctag@mavericktrading.com>
Subject: RE: [CANSLIM] Insider Trades
Date: Thu, 29 Aug 2002 07:17:51 -0600
Previous Article (by Date): Re: [CANSLIM] Insider Trades "Tom Worley"
Top of Thread: [CANSLIM] Insider Trades "Katherine Malm"
Articles sorted by: [Date]
[Author]
[Subject]
This is a multi-part message in MIME format. - ------=_NextPart_000_0031_01C24F2C.2F51A3B0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit I dont use it enough but I keep reminding myself to study insider buying/selling. As a general statement I agree on insider selling not being to important and insider buying being quite useful. I have read that in a few different books and interviews from people I pay attention to like Marty Zweig and Norman Fosback who wrote Stock Market Logic. But what I need to go research is the extremes of both. In Stock Market Wizards by Schwager he interviews Ahmet H. Okumus who says he uses insider buying/selling extensively talking about how regular insider activity doesnt have much predictive power but he goes and looks at the amount bought/sold compared to the insiders net worth and things like that and judging by his trading results it must work. But for right now I just do a cursory glance to see if they are buying or selling but dont use it as key decision making tool. David Taggart -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tom Worley Sent: Thursday, August 29, 2002 7:07 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] Insider Trades I have always ignored insider selling as "noise", since there are many reasons behind it (buying a house, diversifying their finances, new car, college tuition, options in the money and about to expire, etc.) that have nothing to do with "M", their company, or anything else we could care about. On the other hand, I know of only two good reasons for insiders to be a buyer - hype the stock (build confidence), or to make money (they see it as their best investment opportunity). On the other hand, I have found few insiders that really understand the markets and how the investment community behaves. And insiders that have sold are prohibited from buying new shares within 12 months, I think, so they can't trade their company stock. A parity ratio is indeed significant, especially given corporate governance issues today, and the new rules on disclosure about to take affect. But we also don't want bullish sentiment, we want everyone scared of a total collapse!! With Martha Stewart now being sued by a shareholder for selling her own company stock (presumably in anticipation of it tanking eventually when her Imclone trade being revealed, which both happened later), I also wonder how many insiders may be deciding not to sell for fear of perception, especially if they know there is anything questionable. Oh, I am so cynical these days!!! Guess that's what happens when I get stopped out on two stocks in just one day, and I don't normally even use hard stops. ----- Original Message ----- From: Katherine Malm To: canslim@lists.xmission.com Sent: Thursday, August 29, 2002 8:52 AM Subject: [CANSLIM] Insider Trades Hi All, This excerpt is from John Mendelson's Weekly report (Schwab Capital Markets). I thought it interesting from a CANSLIM point of view, as insider trading patterns are one of the secondary indicators under buying/selling strategies. As insiders will be required to report more quickly, I wonder if this will create more "noise" or provide more information when looking at the charts. Thought I'd also include a link for my favorite insider tracking site: http://insider.thomsonfn.com/tfn/insider.asp?linkcode=7rdcg6divt9fsuu5awkj. --Katherine ========Mendelson Excerpt (highlighting is mine)========= Some recent market statistics look encouraging. Corporate executives appear to be more optimistic on their own companies as the insider trading data for the week ended August 16, 2002 showed a parity of sales to purchases (a ratio of 1.01), as opposed to the 4 to 1 ratio of sales to purchases two months ago, according to Vickers Weekly Insider Report. Ratios close to 1 to 1 between insider sales and purchases have been very unusual over the past thirty years with these events producing a gain of about 30% in the popular market averages over the next year. An classic example of the insider trading ratio dropping to around parity was the 1.18 reading for the week ended August 20, 1982, just after a major bottom in the market. The recent August 16 ratio was three weeks after the July 24, 2002 low. Since most corporate insiders acquire their stock in grants or by exercising options rather than by outright purchases and because executives buy homes, educate children etc., selling normally outweighs buying. For years, I have believed a ratio of less than 2 to 1 is a bullish sign....as noted above, the latest reading is 1.01 to 1. This indicator may become even more useful, as next month companies will be required to report insider trades within two days of execution rather than the current regulation of reporting by the 10th of the month. - ------=_NextPart_000_0031_01C24F2C.2F51A3B0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2712.300" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV><SPAN class=3D102410813-29082002><FONT face=3DArial color=3D#0000ff = size=3D2>I dont=20 use it enough but I keep reminding myself to study insider = buying/selling. =20 As a general statement I agree on insider selling not being to important = and=20 insider buying being quite useful. I have read that in a few = different=20 books and interviews from people I pay attention to like Marty Zweig and = Norman=20 Fosback who wrote Stock Market Logic. But what I need to go = research is=20 the extremes of both. In Stock Market Wizards by Schwager he = interviews=20 <STRONG><FONT face=3D"Times New Roman" color=3D#000000 size=3D3>Ahmet H. = Okumus who=20 says he uses insider buying/selling extensively talking about how = regular=20 insider activity doesnt have much predictive power but he goes and looks = at the=20 amount bought/sold compared to the insiders net worth and things like = that and=20 judging by his trading results it must work. But for right now I = just do a=20 cursory glance to see if they are buying or selling but dont use it as = key=20 decision making tool.</FONT></STRONG></FONT></SPAN></DIV> <DIV><SPAN = class=3D102410813-29082002><STRONG></STRONG></SPAN> </DIV> <DIV><SPAN class=3D102410813-29082002><STRONG>David = Taggart</STRONG></SPAN></DIV> <BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px"> <DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT = face=3DTahoma=20 size=3D2>-----Original Message-----<BR><B>From:</B>=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>Tom=20 Worley<BR><B>Sent:</B> Thursday, August 29, 2002 7:07 AM<BR><B>To:</B> = canslim@lists.xmission.com<BR><B>Subject:</B> Re: [CANSLIM] Insider=20 Trades<BR><BR></FONT></DIV> <DIV><FONT face=3DArial>I have always ignored insider selling as = "noise", since=20 there are many reasons behind it (buying a house, diversifying their = finances,=20 new car, college tuition, options in the money and about to expire, = etc.) that=20 have nothing to do with "M", their company, or anything else we could = care=20 about. On the other hand, I know of only two good reasons for insiders = to be a=20 buyer - hype the stock (build confidence), or to make money (they see = it=20 as their best investment opportunity). </FONT></DIV> <DIV> </DIV> <DIV><FONT face=3DArial>On the other hand, I have found few insiders=20 that really understand the markets and how the investment = community=20 behaves. And insiders that have sold are prohibited from buying = new=20 shares within 12 months, I think, so they can't trade their = company=20 stock.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=3DArial>A parity ratio is indeed significant, = especially given=20 corporate governance issues today, and the new rules on disclosure = about to=20 take affect.</FONT> <FONT face=3DArial>But we also don't want = bullish=20 sentiment, we want everyone scared of a total collapse!! With Martha = Stewart=20 now being sued by a shareholder for selling her own company stock = (presumably=20 in anticipation of it tanking eventually when her Imclone trade being=20 revealed, which both happened later), I also wonder how many insiders = may be=20 deciding not to sell for fear of perception, especially if they know = there is=20 anything questionable.</FONT></DIV> <DIV><FONT face=3DArial></FONT> </DIV> <DIV><FONT face=3DArial>Oh, I am so cynical these days!!! Guess that's = what=20 happens when I get stopped out on two stocks in just one day, and I = don't=20 normally even use hard stops.</FONT></DIV> <DIV><FONT face=3DArial></FONT> </DIV> <DIV>----- Original Message ----- </DIV> <DIV style=3D"FONT: 10pt arial"> <DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20 title=3Dkmalm@earthlink.net = href=3D"mailto:kmalm@earthlink.net">Katherine Malm</A>=20 </DIV> <DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= </DIV> <DIV><B>Sent:</B> Thursday, August 29, 2002 8:52 AM</DIV> <DIV><B>Subject:</B> [CANSLIM] Insider Trades</DIV></DIV> <DIV><BR></DIV> <DIV>Hi All,</DIV> <DIV> </DIV> <DIV>This excerpt is from John Mendelson's Weekly report (Schwab = Capital=20 Markets). I thought it interesting from a CANSLIM point of view, as = insider=20 trading patterns are one of the secondary indicators under = buying/selling=20 strategies. As insiders will be required to report more quickly, I = wonder if=20 this will create more "noise" or provide more information when looking = at the=20 charts. Thought I'd also include a link for my favorite insider = tracking site:=20 <A=20 = href=3D"http://insider.thomsonfn.com/tfn/insider.asp?linkcode=3D7rdcg6div= t9fsuu5awkj">http://insider.thomsonfn.com/tfn/insider.asp?linkcode=3D7rdc= g6divt9fsuu5awkj</A>.</DIV> <DIV> </DIV> <DIV>--Katherine</DIV> <DIV>=3D=3D=3D=3D=3D=3D=3D=3DMendelson Excerpt (highlighting is = mine)=3D=3D=3D=3D=3D=3D=3D=3D=3D</DIV> <DIV> <P>Some recent market statistics look encouraging. Corporate = executives appear=20 to be more optimistic</P> <P>on their own companies as the insider trading data for the week = ended=20 August 16, 2002 showed a parity of</P> <P>sales to purchases (a ratio of 1.01), as opposed to the 4 to 1 = ratio of=20 sales to purchases two months ago,</P> <P>according to Vickers Weekly Insider Report. Ratios close to 1 to 1 = between=20 insider sales and purchases have</P> <P>been very unusual over the past thirty years with these events = producing a=20 gain of about 30% in the popular</P> <P>market averages over the next year. An classic example of the = insider=20 trading ratio dropping to around parity</P> <P>was the 1.18 reading for the week ended August 20, 1982, just after = a major=20 bottom in the market. The recent</P> <P>August 16 ratio was three weeks after the July 24, 2002 low. Since = most=20 corporate insiders acquire their</P> <P>stock in grants or by exercising options rather than by outright = purchases=20 and because executives buy homes,</P> <P>educate children etc., selling normally outweighs buying. For = years, I have=20 believed a ratio of less than 2 to 1</P> <P>is a bullish sign....as noted above, the latest reading is 1.01 to = 1. This=20 indicator may become even more </P> <P>useful, as <EM><FONT color=3D#0000ff>next month companies will be = required to=20 report insider trades within two days of execution = rather</FONT></EM></P> <P><EM><FONT color=3D#0000ff>than the current regulation of reporting = by the=20 10th of the month.</FONT></EM></P></DIV></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_0031_01C24F2C.2F51A3B0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
Previous Article (by Date): Re: [CANSLIM] Insider Trades "Tom Worley"
Top of Thread: [CANSLIM] Insider Trades "Katherine Malm"
Articles sorted by: [Date]
[Author]
[Subject]