Sunday, August 30, 2009
Best buying opportunity since the Great Depression?
TrimTabs is reporting that insiders know better:
Selling by corporate insiders in August has surged to $6.1 billion, the
highest amount since May 2008. The ratio of insider selling to insider buying
hit 30.6, the highest level since TrimTabs began tracking the data in 2004.
"The best-informed market participants are sending a clear signal that the
party on Wall Street is going to end soon," said Charles Biderman, CEO of
TrimTabs explained that insider activity is not the only sign the rally is
about to end. The TrimTabs Demand Index, which tracks 18 fund flow and sentiment
indicators, has turned very bearish for the first time since March.
For example, short interest on NYSE stocks plummeted by 10.3% in the second
half of July and margin debt on all US listed stocks spiked 5.9% in July, while
51.6% of advisors surveyed by Investors Intelligence are bullish, the highest
level since December 2007.
"When corporate insiders are bailing, the shorts are covering and investors
are borrowing to buy, it generally pays to be a seller rather than a buyer of
stock," said Biderman.
TrimTabs also reports that the actions of U.S. public companies have been
bearish. In the past four months, companies have been net sellers of a record
$105.2 billion in shares.
"Investors who think the U.S. economy is recovering are going to get a big
shock this fall," said Biderman. "Companies and corporate insiders are signaling
that the economy is in much worse shape than conventional wisdom believes."
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