We have monitored the buy and sell activities of the officers and directors of the major U.S companies since 1990. I must point out that the SEC reported filings of insider buys and sells of their own companies’ shares over the last four weeks have hit a total of over $2,000,000,000 in dollar value ($2 Billion dollars). That is the highest total for a four week period that we have ever seen…..ever!
While this level of insider selling is a strong fundamental negative for the overall stock market, very often it proves to be a very positive indicator for the gold and other commodities markets as well as gold mining stocks.
Note well that the insider selling has rarely ever been covered comprehensively by the brokerage industry as it inhibits investment volume. Many investors are reluctant to invest in companies when their managements are heavily selling their own shares.
Last week the officers an directors sold $529,414,026 worth of the shares of the companies that they work for and/or are directors of. It should send a message to investors to at least take some profits off the table. So check each company.
One may ask if the officers are selling all of their personally owned shares? No! not at all. But they are taking substantial amounts of profits out ot the market….think about that. The last two times we found insider selling at this rate was at the last two market tops which then saw 40% declines ensue.
Yet, there are numerous stocks that are quite undervalued and have seen consistent insider (officers and directors) buying. Sectors that have seen significant insider buying over the last three years are the Canadian resource and gold mining stocks.
Keep in mind that a bull market in commodities and commodities stocks generally occurs simultaneously with a bear market in the large industrial stock market such as the Dow Jones Industrials. The commodities markets suggest that they could be commencing a bull market which indicates that we could be facing a bear market in the industrial stocks.
*** What we are saying is that we need a bear market in the industrial stock market to see a bull market occur in the gold, silver, hard assets and gold mining stocks.