Insider Buying CON-fidence
Pots call Kettles Black... UBS downgraded credit card companies American Express, Capital One and Discover Financial to Sell.
Merrill Lynch downgraded Wachovia and Wells Fargo to Sell.
Merrill Lynch, Goldman Sachs and Bear Stearnswere upgraded to Market Perform from sell at Punk Ziegel. Lehman Brothers was upgraded to Buy from Market Perform.
CON-fidence?... Chief executive officers, directors and other senior officials in corporate America are...
buying more of their companies' shares than they're selling for the first time since 1995.
Total purchases were 1.44 times more than sales, the first time in 13 years that insiders became net buyers.
The S&P 500, the benchmark for American equities, hasn't fallen in the 12 months after insiders bought more than they sold.
The last seven times insiders bought more than they sold, between 1988 and 1995, the Standard & Poor's 500 Index rallied an average 21% in the following 12 months.
Catching falling knives? ... Q4 profits dropped an average 25% for the 289 members of the S&P 500 that have reported so far.
Home construction and finance, the cornerstones of the economy, are suffering like never before with plunging real estate prices and lagging consumer spending.
The amount of short selling -- when traders sell borrowed shares expecting to buy them back after prices fall -- grew to 3.7% of the total shares on the NYSE last month, the highest since at least 1931.
Don't stop believing?.... Why start believing in financial sector insiders now?
After all, they were the very ones who should have been smart enough not to buy their stocks right before they tanked anywhere from 50% to 70%.
Heres a small list of insiders that bought with CON-fidence last year, just prior to the financial sector tanking....
Bear Stearns director Paul Novelly spent $7.4 million on 50,000 shares of his company’s stock back in March at $150 a piece. He was recently down about $3.8 million on the position.
Thornburg Mortgage chief executive Garrett Thornburg was recently out over $13 million on 2007 purchases of his company’s stock.
Citigroup executive Thomas Maheras purchased $3.8 million worth of his bank’s stock at $51 last March. He’s gone from the bank now. But if he still holds the position, he’s down about $1.9 million.
Security Bank director Benjamin Griffith was recently down about $5 million on purchases he made in his bank’s stock last year.
The list goes on and on. Thanks guys.
Insiders have been buying stock in five industries: telecommunications, industrials, consumer discretionary, energy and materials.
No one can predict a market bottom, and there will be more downgrades and write downs to come.
However, sentiment is extremely negative and future bad news may be already priced in.
If it is, then lower rates should lower the cost of borrowing, hopefully increasing profits and stock prices.
The market, although no longer an accurate or truthful reflection of economic health or expectations, will be the final arbiter.
Merrill Lynch downgraded Wachovia and Wells Fargo to Sell.
Merrill Lynch, Goldman Sachs and Bear Stearnswere upgraded to Market Perform from sell at Punk Ziegel. Lehman Brothers was upgraded to Buy from Market Perform.
CON-fidence?... Chief executive officers, directors and other senior officials in corporate America are...
buying more of their companies' shares than they're selling for the first time since 1995.
Total purchases were 1.44 times more than sales, the first time in 13 years that insiders became net buyers.
The S&P 500, the benchmark for American equities, hasn't fallen in the 12 months after insiders bought more than they sold.
The last seven times insiders bought more than they sold, between 1988 and 1995, the Standard & Poor's 500 Index rallied an average 21% in the following 12 months.
Catching falling knives? ... Q4 profits dropped an average 25% for the 289 members of the S&P 500 that have reported so far.
Home construction and finance, the cornerstones of the economy, are suffering like never before with plunging real estate prices and lagging consumer spending.
The amount of short selling -- when traders sell borrowed shares expecting to buy them back after prices fall -- grew to 3.7% of the total shares on the NYSE last month, the highest since at least 1931.
Don't stop believing?.... Why start believing in financial sector insiders now?
After all, they were the very ones who should have been smart enough not to buy their stocks right before they tanked anywhere from 50% to 70%.
Heres a small list of insiders that bought with CON-fidence last year, just prior to the financial sector tanking....
Bear Stearns director Paul Novelly spent $7.4 million on 50,000 shares of his company’s stock back in March at $150 a piece. He was recently down about $3.8 million on the position.
Thornburg Mortgage chief executive Garrett Thornburg was recently out over $13 million on 2007 purchases of his company’s stock.
Citigroup executive Thomas Maheras purchased $3.8 million worth of his bank’s stock at $51 last March. He’s gone from the bank now. But if he still holds the position, he’s down about $1.9 million.
Security Bank director Benjamin Griffith was recently down about $5 million on purchases he made in his bank’s stock last year.
The list goes on and on. Thanks guys.
Insiders have been buying stock in five industries: telecommunications, industrials, consumer discretionary, energy and materials.
No one can predict a market bottom, and there will be more downgrades and write downs to come.
However, sentiment is extremely negative and future bad news may be already priced in.
If it is, then lower rates should lower the cost of borrowing, hopefully increasing profits and stock prices.
The market, although no longer an accurate or truthful reflection of economic health or expectations, will be the final arbiter.
Comments