Thursday 7 November 2013

Insider Activity and Trades

What better way to know about a company than to follow what the insiders think. Insiders in this sense refers to the key people in a particular company. In this blog we consider the insiders to be the board of directors and the key management.

These insiders can provide a particular insight into the health of a company. It is said that the insider can sell their stake in a company for many reasons:

1) they want to lock in the profits made
2) they need cash fast
3) they believe the company's stock is going down in the near/long term
4) many other reasons

but usually they buy because of only 1 reason, that is:

1) they believe the stock price will go up

We will study this as we go along and I will highlight some examples as part of the research. This is another method of following the big boys or the smart money. We used to follow the commercials. Now we follow the people who knows much more than the commercials do. The people who knows the inside story. The insiders.

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