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Guru Insider Research (II): Can Aggregated Insider Trading Activities Predict the Market?

Can Aggregated Insider Trading Activities Predict the Market?

July 08, 2010

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GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.3/5 (52 votes)



DanU - 5 years ago
One of the reasons why some people are being involved in insider trading, it's because of the greediness to be rich and have power. There have been several people who have arrested for doing such wrongdoing. We quite often hear tales of high powered professionals taking advantage of their positions; and if you are like me you might question why somebody would do something so stupid when they already have a cozy job and lifestyle. Danielle Chiesi is probably the most recent case of somebody hurting their business in the interests of themselves; she has been arrested on charges of insider trading. Basically with insider trading individuals have the benefit of knowing whether or not to sell or buy stock before the remainder of the public, making it an unfair game.

I found this here: Danielle Chiesi on trial for insider trading

Gurufocus premium member - 5 years ago
While there are certainly illegal insider trades, but most of the insider trading activities are legal. Insider sells for the purpose of liquidity and diversification. Study shows that insiders buy based on long term perspectives of their companies.
Dpradeep73 premium member - 3 years ago

Insider Trading is illegal only if the information is ma.) Material b.) Non-Public. It has to be material because 'I bought erasers or pencils for the company' is information that outsiders done know about but it is not important to the valuation of the company. Once "materiality" is established, it has to be "secret" information that nobody else knows off. i.e..It is non-public because of which insiders can unfairly benefit. Once the information has been released to the public the insiders can trade on the information. This is perfectly reasonable and logical.
Poolgmac - 2 years ago
NOVC insiders are buying right up to black out period June 30th. They are changing three billion dollar markets

5B residential appraisers www.streetlinks.com that is mandated by Dodd Frank Act. Gross Revenue grown from 35M in 2009 to 178M in 2012. I believe they are at inflection point and can absorb up to 20% market share or 1 Billion in Gross Revenue quickly. EFX is key Partner

Adventtax.com was founded by HR Block x CEO Mark Ernst who is now COO of FISV. He still owns 13.5% of AFS in family trust. Between two jobs he was #2 at IRS. Western Union and key Partner.

CorvisaCloud I do not have clarity on this accept to say Twilio is key Partner

NOVC controls a DTA like Kyle Bass MTG mostly hidden by GAAP. This will shield Taxable Income for yrs. See NOVC twitter handle @GrowGreatIdeas which implies a harvest so do not be surprised to see NOVC sell a piece of Streetlinks.com to FISV or EFX say minority interest say 25% for 300M immediately placing an enterprise value in access of one billion. WU could buy a piece of Adventtax and this 50 cts stock has 7-10 of cash on hand. All in my opinion. Mass Mutual, Babson Capital, Jefferies, are common shareholders that support NOVC. The only debt was restructured by owners Fortress, FBR, RAS down to nominal rate of 1%. What do these investors know Mr. Market does not?

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