For many years we have analyzed the daily reported “buys and sells” of the officers and directors (insiders) of the US and Canadian stocks to help determine if the stocks could be undervalued or overvalued. As you know, the officers and directors are required to report within two business days any of their purchases or sales of their own companies’ shares.  It is illegal not to report any transactions.

The accuracy of our analysis recently has not been as effective as it has been in the past. Why? Because the markets are dominated by the fast trading funds that can obfuscate the insiders personal buying and selling. It is now estimated that over eighty percent of the market volume is trading oriented volume and not true investment volume. So traders are in fast and out fast.

Overall, we used the largest twenty buys and sells for two weeks ago and it was not positive, rather it was alarming, In the largest twenty transactions, the insiders bought a total of approximately $37 million in dollar value of their own companies’ stocks; and for the same period they sold $622 million in dollar value of their own personally held shares in their own companies’ stocks. So for one purchase there were 16 sales…….Negative!

And again last week there were no positive indications from the “insiders”. The most informed of all investors merely purchased approximately $79 million in dollar value, while for the same period; they sold $524 million in dollar value of their own shares. So we have six to seven insider sells to one insider buy. It suggests that profits should be taken……now.

Yet in Canada, for the resource/commodities sector stocks such as gold and silver, there is very little selling at all. There has been accumulation by the insiders. In our view, we are in a long term bull market in commodities.