"They Know Something That We Don't" – Corporate Insiders Are Dumping Their Stocks "At Levels Rarely Seen"

Tyler Durden's picture

Authored by Daniel Lang via SHTFplan.com,

There aren’t any surefire ways to tell if the stock market, and perhaps the rest of the economy, is about to take a nosedive. That’s because millions of people with millions of ideas are involved, so it’s an inherently unpredictable system. However, there are certain players in our economy that have a lot more influence and insider knowledge than the rest of us. So when they make a move in unison, you know there’s a good chance that something is about to go down.

And that’s exactly what’s going on with the stock market right now. The people who would stand to lose the most if the markets crashed; the corporate executives and insiders, are all jumping ship and selling their stocks.

As the investing public has continued to devour stocks, sending all three major indexes to record highs in the last few months, corporate insiders have been offloading shares to an extent not seen in seven years. Selling totaled $10 billion in March, according to data compiled by Trim Tabs.

 

 

It’s a troubling trend facing an equity market that’s already grappling with its loftiest valuations since the 2000 tech bubble. If the people with the deepest knowledge of a company are cashing out, why should investors keep buying at current prices?

 

The groundswell of insider selling has the attention of Brad Lamensdorf, portfolio manager at Ranger Alternative Management, and he doesn’t like what he sees.

 

“This is definitely a negative sign,” Lamensdorf wrote in his April newsletter. “They do not see value in their own companies!”

And this isn’t a recent trend. While ordinary investors were optimistically diving into the stock market after Trump was elected, these people were dumping their stocks as far back as February.

Chief executives and other corporate insiders are selling stock hand over fist now that the quarterly earnings season is over, a report from Vickers Weekly Insider shows. Transactions by insiders are restricted around a company’s report.

 

“Insider selling has jumped again, and this time to levels rarely seen,” analyst David Coleman wrote in Monday’s note.

 

 

In the last week, insiders’ sale transactions on the NYSE outnumbered their purchase transactions by more than 11 to 1, according to Vickers, a publication of Argus Research. The 11.47 reading is 3.5 standard deviations above the mean, according to Coleman.

Clearly, they know something that most Americans don’t. I’d wager that they know the stock market can’t keep reaching record highs indefinitely, they know the economy is resting on shaky ground, and they know that this sudden surge of investments in the stock market is their last chance to make a killing before the whole thing comes crashing down.

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Haus-Targaryen's picture

Give me a chart with a 30 year horizontal axis. These 18 month charts tell me literally zero. 

NotApplicable's picture

Surely they're just diversifying their portfolios... right?

Tarshatha's picture

Question is, where are they parking their money,...., the dollar, real-estate,...., what's not in a bubble?

 

Oh yeah, that barbarous metal that does nothing.

Raffie's picture

There is this mass sucking sound and its not coming from their mouth.

The rats are rushing to get off the sinking ship.

Son of Loki's picture

Aetna and CIGNA are both up 25% since the election. So not everyone is dumping evidently.

GUS100CORRINA's picture

What do the insiders know that we don't?

Answer: Carmageddon: After Abysmal April Sales, Auto Workers Prepare For "Extended" Summer Shutdowns

It will simply be a family of "<BLANK>mageddons" with BLACK SWAN events everywhere.

TruxtonSpangler's picture

Here cometh the June/July bond collapse

Raffie's picture

There will be resistance due to optimism, but since everything is attached to everything with enough negativity in other markets will/maybe pull down the others with it.

STAND BY TO BE AMAZED 

Buck Johnson's picture

Yep, getting off the ship while they can.

 

 

Raffie's picture

Women and children first my ass, the rats are running past them to be first.

Once the panic sets in will be 'Every rat for them selves.'

SgtShaftoe's picture

You're offending the rats. These people are not even human. They abandoned their humanity a long long time ago.

I would recommend giving your emergency preps another go-through. Make sure those mags are all loaded and ready.

Things will very likely get very strange when this breaks.

Yukon Cornholius's picture

Most people are stuck in the locked goyim hold. No (((escape))).

BandGap's picture

 All I own is mining stocks. And despite silver getting hammered once again today the stocks are up 8-10%. Yep, somebody knows something.

Osmium's picture

Do corporate executives actually buy stock?  Aren't they given share every year?  So it makes sense that every year they would sell stock.

CJgipper's picture

Yes, but they go up as you hold them.  If your company is doing good, you hold them and make even more money.

 

Why are they selling?  They know that even the non-GAAP profits are gone.  The books are cooked to beyond burnt and there's nothing left to squeeze out.

swmnguy's picture

Not only that, they aren't reinvesting corporate profits.  They're using them to buy back shares, manipulating stock prices upward to fatten up their Earnings Per Share bonuses.

But hold the panic.  This story is from SHTFplan, which is clickbait extraordinaire.

Golden Showers's picture

Rip my stockings! Rip them. Rip my stockings!

I am Jobe's picture

Don't tell the folks who are relying on their 401K, IRA , Pensions. Pension looting will be the first followed by Blackstone with the 401K.

Seasmoke's picture

Deja Vu. All over again !!!

2ndamendment's picture

"Clearly, they know something that most Americans don’t. I’d wager that they know the stock market can’t keep reaching record highs indefinitely, they know the economy is resting on shaky ground, and they know that this sudden surge of investments in the stock market is their last chance to make a killing before the whole thing comes crashing down."

 

To be honest, this is a total load of horse manure. Most CEO's and execs barely know anything past their very limited knowledge of their business. They have no clue what's going on with the stock market. 

Sick Monkey's picture

Agreed we don't even know who's buying. QE = invisible money flow.

kliguy38's picture

LOL........correct.....they're more concerned with their T time at the club and whether they have reservations at La Dooshe at 9 ............these guys are like Icahn has said.....a bunch of fraternity presidents sitting at the campus bar every afternoon.

Aubiekong's picture

What?  I dumped all of mine several weeks ago.  Better early than one minute late....

Phenomenon_Noumenon's picture

Apparently they read ZeroHedge.

FreedomWriter's picture

Are they having trouble paying their bills too? That's why I sold all my shares...

giorgioorwell's picture

ZH has literally been publishing these "corporate insider selling alerts" every six months for the last 6 years...broken record that I guess might some day will be right.  

Teja's picture

The stock market will crash the day when Zero Hedge officially declares that there is no sign it will crash in the next 10 years.

JustPrintMoreDuh's picture

Silly doomers, staux can only go up.

CJgipper's picture

That's a quote from the FOMC speech right?

Fed-up with being Sick and Tired's picture

Corporate guys sell WHEN THEY CAN at relative highs.  We all have to remember that there are varying levels of ISO and NON-Qual options that execs CAN sell WHEN THE RULES, all Governed by Insiders (the TOP GUYS can normally sell DAMNED NEAR 90 days post IPO).   I was a second level Exec and had to wait a year to sell and I did the VERY DAY after, and I completely sold out per rules and then left that fucking lying piece of shit Corporate life.  NEVER LOOKED BACK.

Dg4884's picture

How ingenuine.  "They"?  Name some companies.  Let's keep the details relatively vague so no one catches on to this being another fear porn article.  I was done with the market a couple years ago.  I don't give a crap.

brushhog's picture

ZH has posted this article, with a few minor tweeks and changes, everyday since 2010. The elites are pretty fucking dumb if they've been "dumping stocks" for 7 years while the market has soared to all time highs.

Deep Snorkeler's picture

The Insiders Know It Can't Last Much Longer

1. We all live in a beautysilly world of crazed asset values.

2. In Silicon Valley, a string of failures when taken in sum, 

is considered a success.

3. Bernie Madoff was in business for 38 years.

4. In a fraud-based economy, mass disinformation is good,

click-fraud is real value, and you must set your morals on fire.

scrappy's picture

Snap Chat will make loads of money. What could go wrong?

Oh, yea, that technology thingy...

I am investing in this right now, my savior, my king...and more!

https://www.youtube.com/watch?v=FINwufXxaME

shimmy's picture

giorgioorwell beat me to it. I have read this same stuff here for at least 5 years and the big crash has yet to arrive.

Makes me wonder if one of the reasons to be pushing the doom and gloom is to keep people on the sideline and not get more money as many who listened lost out on thousands by sitting out. I remember reading about various stocks here as well over the yeasr that were supposed to crash any minute because they had some periods of drops. Apple, Google, Amazon, Facebook, Tesla...how'd all that work out?

Kind of reminds me of the global warming nuts and all the other people of hardcore zealotry (religious folk who go on about the end of the world are a great example) who continually say this or that is coming and it doesn't.

Sure, sooner or later it will but enough already with continually pushing something over and over and being wrong each time. I bet this Daniel Lang guy has made bigly cash while pushing the whole sky is going to be falling based on these insider moves narrative.

 

crazybob369's picture

Just because something is inevitable, does not make it eminent.

AMZ P/E ratio-177

GOOG-35

Tesla-Infinite (no profits EVER)

FACE-44

APPL-18

Of the companies you mention, only one has a P/E ratio that’s sustainable. All the others will eventually adjust to normalcy. After all, who want to wait 177 years to get the money back on their investment.  

FredGSanford.'s picture

I've been hearing this for years.

crazybob369's picture

I’ve been having a hard time reconciling the fact of close to 25% unemployment and the continued “decent” economic data. Where are people finding money to buy stuff. It didn’t make sense to me that the masses would continue to max out their credit cards without a decent source of income. I finally realized that they’re “betting on the come”. They look at their 401k/IRA statements each month, look on Zillow at the price of their house going straight up (my own house has gone up 100% in 4 years, and I live in a pretty crappy neighborhood), think of themselves as that much “richer” and figure worst case, home equity loan, or 401k loan to pay off bills if necessary.

In the end, the rich, powerful and well connected are going to make them bend over, grab their ankles and take what’s coming: they will lose their houses, IRA’s, 401k’s, jobs and, in some cases, even their freedom.

Happened 10 years ago, and history will repeat…but much, much worse this time.

Longus Dongus's picture

Useless executives always sell their stock options they recieve every quarter. Then when their sell offs devalue the stock, they'll buy a few back at a bargain price. That is if they feel like it.

Zuhalter's picture

I once worked for a startup with an incestuous relationship between the board and the executive leadership. They all took turns being the CEO. Half were private market makers who'd shop to retailers to convert their class A into C shares to dump on all the dupes using E-Trade, fluff everything up with forward looking safe harbor statements to prime the pump, sell their shares, then buy back after the dust settled. After the pump-n-dump you'd see them with new cars, new houses, boats, or leave to go on an extensive fancy vacation. Meanwhile we employees were stuck with worthless options with 3 year strike dates that always grew more worthless. Couldn't sell our garbage C shares they dispensed like toilet paper to avoid paying bonuses, or trick us into "job promotion" without paying more salary.

SgtShaftoe's picture

Because it's a fucking conspiracy. Somebody better make lots of backups of the Nanex trade data as well as investment statements to be later used in prosecution.

Sick Underbelly's picture

This is stupid reporting:

1) They don't tell what market segments/industries these "insiders" are in

2) They don't quantify the number of "insiders" who BUY or the number who SELL

3) They don't really define the term "insider"

4) They don't even go into further details as to what possible motivations these "insiders" have for selling or buying

They could've easily taken 3 examples...three "insiders"...and talked about who has done what, exploring whether this was psychologically-, price-, and/or something else-motivated.

No no...they just tell you "Wooo! Look!  Deyz sellin'.  Could be da crash!  Maybe she's gawyn ta blow!"

Why do I even waste my time commenting on stupid shit like this?  --don't answer that, please. :-)

datbedank's picture

It's painful I know. Remember this rhyme I just made up:

If the top has blue, the writing's mostly poo. 

Apocalicious's picture

Yeah, they know something alright. They know they're going to get a shit load more stock options anyway. Heads they win, tails they win more - it's great to be the king! 

south40_dreams's picture

While the VIX crashes. Hang on kiddies, we've entered uncharted waters

Zuhalter's picture

Getting tired of these same doom-n-gloom articles ZH, predicting things that everyone knows will happen at some point - in the future. Everyone knows the stock market will always crash - in the future. It always does, always has. It's unavoidable. You just always seems to think it's right around the corner. But even you don't know any better than the experts you quote, or your readers, or myself, when that corner will turn - in the future.

I can make predictions too! In 2020 we will have another presidential election. I can't be sure who will win, but I predict it will either be a Republican or a Democrat.

Maestro Maestro's picture

**Since neither the Americans, the Russians nor the Europeans can even issue their own (national) currencies; none of you are sovereign countries, that is, free peoples. You are all the bankers' witting slaves. The manipulation of gold's price lower is the principal method used by the bankers to hide this fact in plain sight. If gold is not money (alongside whatever else) than you are a slave, period. Read on.**

Worse than the bankers rigging gold and silver prices and not having the gold that they sold you (or selling gold that they don't have via fraudulent COMEX Futures contracts) is the fact that we don't even have MONEY today.  Therefore all financial transactions and economic numbers predicated on the existence of money are FRAUD and FORGERIES presently.

Electronic digits and paper fiat currencies in use today are NOT money, according to the law of the country that issues the reserve currency of the world, the US Dollar (Article 1, Section 10 of the US Constitution); or by the tenets of the science of Economics (i.e., fiat currencies are not money because they are not a store of value nor a unit of account due to the fact that NOT ONE fiat currency's value is actually determined or stipulated in concrete legal terms).  Dollars and Euros and Yens are not even lawfully DEFINED as to what they all are exactly; what their economic worth and transactional value is. Hence, fiat currencies simply cannot constitute the legal foundation of any lawful contract!

(Also, there cannot be either inflation nor deflation in the ABSENCE of money.  Both inflation and deflation are monetary events which cannot take place where there literally is no money.)

What we have today is massive GLOBAL FRAUD mascarading as a monetary system based on the (fraudulent) US dollar because all fiat currencies are basically only a derivative of the US dollar, including the Euro, the Yen, the Yuan, the Rouble, the Shekel and the Riyal.

Furthermore,

Why do a few people get the right to print fake fiat money out of nothing and buy your goods and  services with it whereas you have to WORK to obtain the same worthless money created out of nothing?

THAT is the question at the heart of the matter.  That the bankers manipulate interest rates or the price of gold via fraudulent Futures trading (by selling gold that they don't have) with fiat money is a moot point.

To put it differently: why do the bankers get to have anything that they want without working for it and you, you don't?

All this talk about market rigging, monetary theory and fraudulent (paper) gold trading is a cover-up for INJUSTICE.

The US Constitution FORBIDS the use of debt as money; the US Constitution proscribes (debt) notes which is what the US dollar is presently.  Think, all other currencies are just another name for the US Dollar.

What passes for money today is a CRIME, no more no less.

 
People,

You are all aiding and abetting this crime every time you buy, sell, pay or get paid.

And then you ask, Why our leaders, the politicians, the bankers, and our military men and women are EVIL?

The answer is, because they are just like YOU. They are your sons and daughters.

Sick Underbelly's picture

So, one step further, Maestro...how much gold and silver coin is needed for the whole world to convert to real money?

Once implemented, how do you plan for inflationary pressure of the real money?  Keep on mining, hoping for more finds?

If you tell me, "PM-based cryptocurrencies" how do you prevent manipulation?   How do you account for cross-state and cross-country exchange of physical metals?

RawPawg's picture

you lost me at $10 Billion

a mightly low amount of profit consiering how much more(money)in inside this Casino.