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Insider Selling/Buying Ratio Doubles to 61.8x

Tyler Durden's picture




 

TrimTabs earlier disclosed that the ratio of insider selling to buying had averaged about 31x for August, with $6.3 billion of insider sales matched by only $210 million on insider buys. Insiders apparently decided to exit August with a bang, with the last week of insider transactions doubling the sell-to-buy ratio to 61.8x! Over half a billion in stock was sold, while a whopping $8 million was purchased.

If there is any doubt as to which way insiders were leaning during this "market rally," this data should seal that particular coffin.

Data courtesy of FinViz

 

 

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Thu, 09/03/2009 - 10:44 | 57397 Cheeky Bastard
Cheeky Bastard's picture

one question; is this an all time high ratio of sellers vs. buyers ?

Thu, 09/03/2009 - 11:25 | 57463 Anonymous
Anonymous's picture

Since keeping track in 2004, 30 WAS the all time high!

Thu, 09/03/2009 - 11:43 | 57484 3greenlights
3greenlights's picture

Biderman says they've been tracking the numbers since 2004 and never seen a number higher than 35. Edit: 30, not 35.

http://www.youtube.com/watch?v=i1MVBea6Qaw

Thu, 09/03/2009 - 11:51 | 57505 Cheeky Bastard
Cheeky Bastard's picture

oh; ok; thanks 3greenlights

Thu, 09/03/2009 - 10:45 | 57400 MsCreant
MsCreant's picture

What a dump!

Thu, 09/03/2009 - 13:20 | 57630 bbbilly1326
bbbilly1326's picture

haha, shouldn't that be WHAT.....A........DUMP !!

Thu, 09/03/2009 - 10:47 | 57404 Anonymous
Anonymous's picture

I'm sure there is a perfectly reasonable explanation for this.

Thu, 09/03/2009 - 10:47 | 57406 JohnKing
JohnKing's picture

We have a robo-zombie market, it will continue to run until Obama capitulates, the stench of corruption is not yet strong enough to offend his sensibilities.

Psycho-bankers are still calling the shots.

Thu, 09/03/2009 - 11:08 | 57431 LoneStarHog
LoneStarHog's picture

Psychos may soon be making the shots!

Thu, 09/03/2009 - 11:16 | 57440 JohnKing
JohnKing's picture

Not quite sure what the tipping point is but I think we'll find out. I'm beginning to see jobless numbers in a new context;  570,000 new people with not much left to lose.

Gerald Celente:

"When people lose everything and they have nothing left to lose , they lose it"

Thu, 09/03/2009 - 11:34 | 57473 LoneStarHog
LoneStarHog's picture

If I am sitting on a jury, it will be Jury Nullification Time!

Actually, a good lawyer (Uh,huh!) should use the insane defense. 

"My client is obviously insane, as any sane person knows that the crooked banksters Ain't Worth The Price Of A Good Bullet!

Not Guilty!

(Hummmm...Maybe I can find an old corroded one around here somewhere.)


Thu, 09/03/2009 - 11:40 | 57481 Anonymous
Anonymous's picture

Gerald Celente: "...socialism is egalitarianism."

Thu, 09/03/2009 - 15:49 | 57715 iknowNOW (not verified)
iknowNOW's picture

Then they will make a tidy profit with which they can buy more treasuries!

<remaining content removed by Sacrilege>

Thu, 09/03/2009 - 10:55 | 57415 FoolMeTwice
FoolMeTwice's picture

I am no expert in insider buying/selling trends or ratios but the way I understand it is that insiders will *always* prefer to sell than buy. This is because they have large number of shares in the company through options or otherwise. And if they also get bonus from their company than its like putting all eggs in one basket. So they keep selling their own company's shares and maybe buy something else to diversify.

I wouldn't look too much into selling esp. in times like these where uncertainity runs high. However, insider buying would pique my interest.

Thu, 09/03/2009 - 11:00 | 57422 Hephasteus
Hephasteus's picture

Well Goldman used to have software that would let all the CEO's constantly put their shares on market so that when they sold due to inside information it was harder to track that it was illegal selling. I researched that like a year ago. Have to find it again.

Thu, 09/03/2009 - 12:16 | 57557 Rex Crotch
Rex Crotch's picture

If you find it please post here. Thanks.

Thu, 09/03/2009 - 11:30 | 57467 Anonymous
Anonymous's picture

Partially agreed, but you miss the point.

It not the insider selling that is the indicator. It is the disappearance of buying. That is why he is focusing on the RATIO!

While insiders may prefer to sell in general, they also prefer to buy when it looks like their company is going to grow. So when the ratio expands, it does mean something.

Thu, 09/03/2009 - 10:56 | 57416 Anonymous
Anonymous's picture

Does anyone have historical data showing the correlation between this ratio and market movements? For all we know, this metric may be completely meaningless in terms of what happens to the market.

Thu, 09/03/2009 - 10:58 | 57418 koaj
koaj's picture

the PSA, YHOO things are clearly not the norm

also, ricketts just bought the Cubs..he may need some cash

not saying this is good or not as bearish...it is what it is. it still needs drilling into for specific companies if you choose to use this as an idea generator

Thu, 09/03/2009 - 10:59 | 57419 Lionhead
Lionhead's picture

Here's the spin; insiders are "diversifying" their holdings. They're buying each others stocks to spread their risk. They do this everytime they sell. Very Bullish. Watch for this explanation on CNBC. You must look at this under the proper "light."  ;)

Thu, 09/03/2009 - 11:22 | 57452 curbyourrisk
curbyourrisk's picture

Buying each others stock......sure bring everyone down together.  This worked well in Japan...NOT!

Thu, 09/03/2009 - 10:59 | 57420 Cognitive Dissonance
Cognitive Dissonance's picture

In other words, the rats are leaving the ship.

Thu, 09/03/2009 - 11:00 | 57421 MountainHawk
MountainHawk's picture

This is gona be totally f-ed up, but reality is sometimes that way...

The only way a colored man can become president in America is to be a slave to the white man...

things haven't changed just a fresh coat of paint on a tried and true formula of mobster style corruption

 

Thu, 09/03/2009 - 11:12 | 57435 LoneStarHog
LoneStarHog's picture

Goddamn racist bullshit, as Clinton made the comment during his first term, "I thought as President that I would be in charge" (Paraphrased).

While Clinton claimed to be the "First Black President", HE IS WHITE!

Thu, 09/03/2009 - 11:50 | 57500 They steal from...
They steal from us everyday's picture

White people voted for Obama.  You are making excuses for black people.

 

I would vote for ANY black person who said they would immediately abolish the FED and not pay back any of the debt to the FED but rather confiscate their gold reserves which they stole from us thru Roosevelt.

I would vote for ANY black person who said we are going to limit the government to vital functions only and return the stolen taxpayer money to taxpayers.

Thu, 09/03/2009 - 11:56 | 57512 gmrpeabody
gmrpeabody's picture

+1

Thu, 09/03/2009 - 14:01 | 57719 LoneStarHog
LoneStarHog's picture

Whites in overwhelming numbers voted for The Messiah and were praised as PROGRESSIVES!

Whites in overshelming numbers now DISAGREE with The Messiah and are called RACISTS.

Thu, 09/03/2009 - 11:51 | 57504 Anonymous
Anonymous's picture

So what your saying is that white is not a color? I suppose it's transparent then, like glass?

I guess the only way a colored man, (the white color), can become president in America is to be a slave to the (transparent) man...

Nice try, but isn't it time that people started accepting responsibility for their own actions and stop blaming others for their percieved shortcomings.

History is but a lesson, the present a chance to learn, the future a blank slate. The moral of the lesson, stop dragging the past into the future.

Or in zombie terms, you can't change the past, but you can definitely make work toward a brighter tomorrow, today!

Thu, 09/03/2009 - 11:04 | 57425 Anonymous
Anonymous's picture

Usually insider selling is a completely unreliable metric to use to predict stock market movement but the sheer ratio here is ....troubling.

Thu, 09/03/2009 - 13:24 | 57632 Assetman
Assetman's picture

Sorry... that "completely unreliable" stuff is just not true.

What is true is that insider selling is harder to interptret than insider buying, as there is a natural tendency for executives to "diversify their holdings" when they're harvesting $millions.  It doesn't mean the metic is completely useless.

Now here's what's troubling:

Most of us should know by now that insider buying has declined significantly since March-- but the activity in Feb-Mar was pretty good.  It just wasn't anywhere near 2002-03 "bottom of the bear market" good.  So one troubling thing is that executives could have loaded up the truck in March when valuations were compressed.  Some did... but some didn't.

That not terribly bad in and of itself... but the selling part does make thing worse... and this is where "context" in terms of insider selling becomes important. 

The selling we are seeing today-- and its really ramped up here in August-- is coming at prices that are certainly higher than March 2009.  But the selling is at MUCH LOWER prices than that in December 2007 when the market hit its peak.

So while selling at "new highs" usually has little meaning, selling at an accelerate rate at lower prices means a litte more-- and it shouldn't make investors feel all warm and fuzzy.

What that tells me is that many insiders are gearing for that next big buying/options acquiring opportunity. 

That time clearly isn't now.

Thu, 09/03/2009 - 18:11 | 58096 Anonymous
Anonymous's picture

As an insider , with knowledge of many other insiders ,yes, it is an unreliable metric. Looking at the purchases is a good REVERSE indicator. Looking at sales is just an example of the fortunate being able to cash in during turbulent times. This data is POINTLESS.
Feel free to show any empirical data showing a correlation to insider purchases and a rising market to insider sales and a falling market during equivalent time periods.
CEOs and most "insiders" didnt see the bloodbath coming. What makes you think they have any idea they know whats coming now?

Thu, 09/03/2009 - 11:09 | 57432 digalert
digalert's picture

These folks obviously have no confidence in Oblame-all and uncle Ben.

Thu, 09/03/2009 - 11:10 | 57433 Cheeky Bastard
Thu, 09/03/2009 - 11:13 | 57437 koaj
koaj's picture

holy fuck thats a shitty thing to do to your fans

Thu, 09/03/2009 - 11:24 | 57459 JohnKing
JohnKing's picture

Thats Washington for you.

Thu, 09/03/2009 - 11:31 | 57468 gmrpeabody
gmrpeabody's picture

I've just about had it with professional sports and the overpaid juvenile delinquents and greedy bloated owners. May just start going to the local junior college games. Maybe even highschool games, then call it a weekend.

Thu, 09/03/2009 - 11:12 | 57436 Anonymous
Anonymous's picture

natural gas is trading at about 80%from its last year's high!!now isn't that what people should look at for signs of recovery,since it is basically industrial prodution that drives it higher?and what about elctricity output,another gauge for industrial production improvement(or decline)is there anyway that TD can shed some light on those two issues?

Thu, 09/03/2009 - 11:32 | 57470 msorense
msorense's picture

Yet the rally monkey keeps jumping up and down.  It's so obvious the Fed/gov. is propping the whole thing up, the money they are putting in is practically flowing straight into the pockets of corporate insiders.  It is just galling for small business owners like myself who don't get a penny of this government largesse.  And now they are trying to get rid of leveraged ETFs because they don't want anyone to profit from the coming implosion.  As Faber said, this is all going to end in "di-saaas-ter" (lover his accent!).

Thu, 09/03/2009 - 11:42 | 57485 BobPaulson
BobPaulson's picture

So who gets the old maid cards when the insiders sell? Really. Foreigners are the counterparties?

Thu, 09/03/2009 - 11:45 | 57490 deadhead
deadhead's picture

what i find interesting on this particular report is that on the sell side, there is no Bill Bates/MSFT.....whenever I see Gates on the list, I think it prudent to discount his sells for obvious, historical reasons. 

this list can be summed up in one word..."wow"

thanks TD for this report.

Thu, 09/03/2009 - 12:10 | 57542 Hephasteus
Hephasteus's picture

Oh no. Billy is going to sell 6 billion copies of wndows 7 and make 600 billion dollars on a 8 bllion dollar investment simultaneously driving the entire computer industry into a hyperactive selling frenzy computers and computer components. He'd never sell now.

Thu, 09/03/2009 - 12:22 | 57564 deadhead
deadhead's picture

he unloads constantly and consistently....i have seen at least 4 major unloads in the last ~2months....

Thu, 09/03/2009 - 11:55 | 57511 Anonymous
Anonymous's picture

How about presenting historical data that shows market performance 'x' months forward vs. ratios of insider selling/buying? Not saying that this current ratio means nothing ... but from what I recall reading a while ago, historically CEOs have not been very good about the timing of their insider buying/selling. Can't find that study now.

Thu, 09/03/2009 - 12:11 | 57543 Anonymous
Anonymous's picture

Here is an article from 2006 stating that at that time the selling to buying ratio was 63, the highest in 20 years.

http://www.businessweek.com/investing/insights/blog/archives/2006/12/ins...

Whose data is bunk here? They can't both be right.

Thu, 09/03/2009 - 12:15 | 57556 Anonymous
Anonymous's picture

Are there an average number for insidertrading available ?

Thu, 09/03/2009 - 12:32 | 57575 economicmorphine
economicmorphine's picture

If you're the CEO of Acme Widget and you have your net worth tied up in your company, which has seen sales decline by 30% and you know that this is a long term, secular shift, what would you do:

A:  Sit on it, hope and pray?

B:  Cash out and day trade C, AIG, FNE and FRE?

C:  Buy a shotgun and a farm?

 

It would appear that B is the correct answer, although I am somewhat partial to C.

Thu, 09/03/2009 - 13:27 | 57636 Assetman
Assetman's picture

The correct answer is "D": retire and move to a gated Australian beach community.

Thu, 09/03/2009 - 15:21 | 57853 mdtrader
mdtrader's picture

Inisder selling ratio at 61.8 times. A natural Fibonacci retracement surely. ;-)

Fri, 09/04/2009 - 00:28 | 58396 TumblingDice
TumblingDice's picture

To quote GG:

TODAY, MANAGEMENT HAS NO STAKE IN THE COMPANY!

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Thu, 02/24/2011 - 17:20 | 994752 fletcherfinn
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Easy to read graphs. Now that it's 2011, it's pretty interesting to see how greatly things have changed with selling and trading.

 

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