Retail Investors Sheared Again As Insider Sales Hit Two Year High

Tyler Durden's picture

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

Insider Sales of Stock Hit 2 Year High as Retail Sheep are Fooled Once Again

For a while there it was looking as if the market might actually make its high and move lower before Wall Street and corporate insiders were able to hand the bag over to the suckers in retail.  It looks like that was just wishful thinking, as new stats show the retail sheep taking stock from the oligarchs at the highs as usual.  I guess the more things change the more they stay the same.  From Bloomberg:

Corporate executives are taking advantage of near-record U.S. stock prices by selling shares in their companies at the fastest pace in two years.


There were about 12 stock-sale announcements over the past three months for every purchase by insiders at Standard & Poor’s 500 Index (SPX) companies, the highest ratio since January 2011, according to data compiled by Bloomberg and Pavilion Global Markets. Whenever the ratio exceeded 11 in the past, the benchmark index declined 5.9 percent on average in the next six months, according to Pavilion, a Montreal-based trading firm.


Confidence in equities from individual investors may soften the blow from insider sales this time, according to Pavilion’s Pierre Lapointe, head of global strategy and research.


The ratio of sales versus purchases by chief executives, directors and senior officers at S&P 500 companies is more than twice the average ratio of 5.4 over the past 10 years, according to data compiled by Bloomberg and Pavilion. In the months after the ratio was last at this level, the benchmark index retreated as much as 19 percent from April to October of 2011.


Executives at 153 companies in the S&P 500 unloaded shares between Feb. 11 and Feb. 15, with announcements of sales outnumbering buys by 17 to 1. The top sale that week was made by Google Chief Executive Officer Larry Page, 39, with a divestment worth more than $65 million.


Still, Lapointe wrote, “insider transactions do not move markets, large inflows do” and stocks should be supported over the short term by individual investors pumping money into equities.


Investors deposited $37 billion into equity funds in January, the most since 2004, after pulling almost $300 billion out of stock funds since the market bottomed, estimates from the Washington-based Investment Company Institute show.

They don’t call ‘em sheeple for nothing.


Full article here.

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Glass Seagull's picture



"Excuse me sir/madam, could you please hold this bag for me while I step out to make a phone call?"


Popo's picture

"Sure, no problem.  ... God this bag smells like shit.   Hey, it's on fire!"

SafelyGraze's picture

who you callin sheeple?



GubbermintWorker's picture

I'm with the Government and we'll tend, er, help you!

Doubleguns's picture

Bleating and bleading. How apropriate as the corrupt appropriate.

BKbroiler's picture

fuck 'em.  a fool and his money are soon parted.  Someone responsible, sitting on an owned home, with money in the bank and a steady income could give a shit about the stock market.  There's just a shortage of responsible people these days and a surplus of idiots.  Shear on.

Dead Canary's picture

A fool and his money were lucky they got together in the first place.

Buckaroo Banzai's picture

"OK sure"


Opens bag.

"Oh fuck."

El Oregonian's picture

How long  should I hold the B-A-A-A-A-A-G?

cheesewizz's picture

Man Oh Man!!! Thats one fine looking sheep babe. Were can I find her?

OK pass the bag, I just lost my lunch....


SheepDog-One's picture

'Hand over to retail'....that's where they failed way back in 2008, retail trader for the most part left, and besides everyone is broke so good luck handing the bag to retail it won't EVER happen/

Freddie's picture

Sheep watch TV and Hollywood's shit and enjoy being destroyed.  Animal sheep are far more noble that Obummer voters.

ParkAveFlasher's picture

Tell me about the Muppets, Clarice.

haskelslocal's picture


You did a great piece a few years back breaking down sellers to buyers.

I believe it reached a ginormous (new word in Websters) 30:1 level.


kengland's picture

I don't think so. I think it's the same instituitions passing shares around on any given day. They pick up loose pieces here and there, but retail has been AWOL for years. You did say that a few months ago didn't you?

SafelyGraze's picture

"the same institutions passing shares around "

also known as "the kind of porn that sec likes to watch"


Motorhead's picture

So what am I missing here?  One article mentions hedge funds have never been more bullish, then this article says that insiders are dumping like mad.  Hmmmm.

buzzsaw99's picture

insiders are insiders. hedge funds are hedge funds and often manage dumb money. hmm.

SAT 800's picture

An "Insider" is a reportable group of stock owners by SEC regulation; they are the people who work at the company whose stock was sold. If the managers and Execs.s of ATT&T are selling their stock; they may be in a better position to know what the future earning prospects are than the public; so it's required that these sales are published. Hedge funds are "outsiders"; they just throw darts at the dartboard like everybody else.

Motorhead's picture

I guess then that hedge funds do NOT move the markets, despite what the pundits say.  Hmmm.

buzzsaw99's picture

Investors deposited $37 billion into equity funds in January

Dr. Engali's picture

The fact is American's have a gambling problem. Instead of working for a living they hope to hit it big at one of the many casino formats the country has to offer. Just like Vegas didn't build all those nice resorts by losing, the banks didn't build all those fine towers by holding the bag.

francis_sawyer's picture

[THEY] must be real saavy traders...

Dr. Engali's picture

It's like the lottery... nobody will play the better odds at 1million but you throw a 200 million dollar power ball out there and the sheep will line up at every gas station around the country. When the S&P is at 666 the sheep want out , but set a new high and on-line trading accounts get opened across the country.

jtz5's picture

The odds are the same whether the jackpot is 1 million or 500 million.  You are picking random numbers.  More people play when it's higher, so you have a higher chance of splitting the winnings, but the odds of you winning are exactly the same.

Dr. Engali's picture

No they are not. You have much better odds at the traditional lottery than you do the power ball.


Odds in winning the lottery:        1: 12,271,512

Odds in winning the Power Ball:   1: 175,711,536

jtz5's picture

Only because of the special ball requirement.  If you are playing the traditional lottery, it doesn't matter if the jackpot is 1 million or 100 million...the odds are the same.  If your original comment specified traditional vs. powerball, I would agree.


I didn't see the word traditional in your first post, but now I can see that you were referring to playing 2 different lotteries, not the jackpot size.

Dr. Engali's picture

It's like the lottery... nobody will play the better odds at 1million but you throw a 200 million dollar power ball out there....


Where in there didn't I specify the difference?

jtz5's picture

"lottery" is a generic term, not a reference to a SPECIFIC state lottery like Michigan Lotto 47.  How did I know by you saying "lottery" that you were referring to a specific lottery and not lotteries in general?  The Powerball is a type of lottery.  I read it as "It's like playing the lottery...nobody will play it until the jackpot reaches 200 million." it that big of a deal that I had you clarify?

Mesquite's picture

Relax..." You are the one doing the criticizing...Best we all take our own inventories...

secret_sam's picture

I don't see any criticism.  The point is that the odds of winning any lottery are not affected by how many people are playing.

This is different than something like poker or bingo.

Dry Drunk's picture

You guys know nothing about lotteries. Jackpots cause the smart players/syndicates to come in. Why? Because they are smart.

Oldwood's picture

Gambling is just another redistribution tool much like banking. We have passed the tipping point, well down our way on the slippery slope of people unwilling to work for wealth, for all of the obvious and not so obvious reasons. High taxes make meager returns less and less worth putting labor and capital at risk. Subsidization of non-productive activities combined with high taxes and punative regulations make those who in the past would be considered the most productive amongst us look like the dupes. And as we see, perception rules until reality kicks us in the nuts. I'm wearing a cup.

Freddie's picture

A lot of stupid fux gambled on Hope & Change.

astoriajoe's picture

given the post previous to this, isn't it the hedge funds holding the bag?

DoChenRollingBearing's picture

This is not a surprise to me either.  I can hardly wait until I can see who sold this week.  BARRON'S!  Are you going to finally get an edition out to our town?

Republi-Ken's picture


Hope that $37 BILLION invested in JANUARY

by the SHEEP...

Were ALL REPUBLICAN SHEEP...aka Top 2% Sheep.

RSBriggs's picture

Sorry - try again.   Majority of billionaires are well-connected liberals.  Soros comes to mind.  Fuckberg, Gates, etc.   Ditto most multi-millionaires.  Hollywood in general, etc.   Something like 90% of the top 2% are liberals, and they don't vote Republican.

walküre's picture

Fuckberg and Gates are nett sellers of equities. They're the insiders with access to unlimited corporate paper and they will sell to anyone, at any price as long as anyone is still willing to buy a "share" of their companies. There's always plenty more where that last batch came from.

gmrpeabody's picture

"Were ALL REPUBLICAN SHEEP...aka Top 2% Sheep"

Classic example of the uninformed..., running off at the mouth.

Freddie's picture

By and large, most billionaires get that wealthy because they hitch their wagon to the govt.   Oracle bills the govt insane amounts and it is never questioned.  Buffett has endless sweetheart deals.  His old man was a senator. 


The old saying "behind every great man is a woman."  Behind every billioanire is a corrupt politician.


fonzannoon's picture

The dow is down 50 pts after a 100 point drop and we are all running around with our hair on fire. Until otherwise noted the sheep bought themselves a nice little dip.

Caracalla's picture

No more QE means the dip will just keep getting larger each day.  BTFD died yesterday with the Fed minutes

Melson Nandela's picture

Please look at the 2 day the chart on the real place where the hedgies play, the /TF and /ES. Real money and real margin calls

Oldwood's picture

What do you think they are seeing that would make them want to cash out now? Surely they don't believe that stock prices are over priced or that all of the governments talk of steady growth and recovery are a lie! If that were true then we would all be doomed! Oh No!

gmrpeabody's picture

A little here..., a little there. Adding to my positions as I believe the banks are.