Monday, April 11, 2016

How worried should investors be about insider selling?

A reader raised a question after my generally bullish weekend post (see Equities in a macro sweet spot). The latest report from Barron's of insider activity had shown that readings had risen up into sell signal territory. How worried should investors be about this development?

Insiders tend not to be short-term traders and they have long time horizons. The issue of capital gains vs. short-term trading gains are always on their minds, which means that their holding period is at least one year. If they sell, they have to worry the wash sale rule. So should you react to a single data point of insider activity?

The full post is available at our new site here.

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