theinsiderfund

Insider Buying Week 4-14-23 The Fed stopped hiking rates even though they won’t acknowledge that.

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There was next to nothing to write about regarding insider activity last week. We are in the heart of darkness regarding insider activity. This is how I describe the quarterly blackout period before corporate earnings are released.  Insiders seem to be as gloomy as all the market pundits. They might not be paying much attention, but the market, as measured by the S&P 500, is up over 8% YTD.   Hopefully, we have something clever to say about that in our 1st Quarter Partner letter.  It’s up on our website at Partner Letters. The world changed on March 10th when the … Read more

The Bull Charges as Bears Run in Disbelief Insider Buying Week 3-31-23

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It may be the calm before the storm but the bulls are running. The Fed’s rapid interest rate hikes came to a screeching halt last week. The Fed’s favorite inflation indicator, the Personal Consumption Expenditures Price (PCE) Index came in below expectations Friday.  Hiking interest rates has been one of the key policy tools used by the Fed to cool the economy and ease inflationary pressures. Many investors have been concerned about whether the pace of rate hikes and keeping rates higher for longer could drag the U.S. economy into a recession. That all came to a sudden and unexpected … Read more

Bye Bye Jay Time for Another Chair Insider Buying Week 3-24-23

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We are deep in the darkness, the earnings blackout period in which corporate insiders are restricted from buying their own shares. It’s a perfect time for short sellers to prey on the frazzled nerves of investors that just experienced their first bank run since the Great Financial Recession of 2008. This time the run wasn’t caused by Wall Street and banks that sold liars loans to uncreditworthy customers but instead by the monetary policy of the Federal Reserve itself. Jay Powell left interest rates at zero far too long and raised them far too fast. He failed at running the … Read more

Federal Reserve Chairman Powell is a Dangerous man

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I wrote to clients in the February update that  Federal Reserve Chairman Powell is a dangerous fellow.  Last week he proved that causing a run on the banking system.  Ironically if the creation of a new Bank Term Funding Program (BTFP)had been in place the week before, Silicon Valley Bank might have avoided failure and bankruptcy. Powell’s rapid hike in interest rates as a cure for the supply-side inflation shock is likely to be as successful as the ancient but now discredited medical practice of bleeding the patient. If Powell was the CEO of a public company, activist shareholders would … Read more

One way this is not like 2008, Insiders are NOT Buying -Insider Buying Week 3-10-23

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This is LIKE 2008, contrary to what you may have heard about the recent Silicon Valley Bank failure.   Banks either don’t want to pay competitive deposit rates or can’t.  Competing with Fed Chairman Powel’s ~5%  treasuries is hard. Actually no banks can compete with it. Vast sums are being withdrawn from the banking system. Ironically the stock market is on the only place you will be able to compete with the yield crisis that the Fed is precipitating.  Many solid companies are paying good dividends with the likely prospect of raising them.  So tell me, how is this not like … Read more

‘t want to go down.

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Despite the best efforts of banking emperors like Jamie Dimon of JP Morgan or all-knowing market strategists like Mike Wilson of Morgan Stanley, this stock market refuses to go down.  Last week’s market rally has already numbed the pain from February’s losses. The bulls are stomping their hoofed feet at the fences, dying to bust out. An insomniac lies awake at night, Puzzling over a conundrum so tight; the answer eludes them, it’s out of sight, And the puzzle keeps them up till daylight. They toss and turn, and they try to sleep, But the puzzle is just too deep; … Read more

The Fed has a Hammer but needs a Scalpel Insider Buying Week 2-24-23

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It’s a commonly held view amongst market strategists that the Fed follows interest rates, not determines them. You don’t have to look very far to see plenty of evidence of that.  It’s a quiet conspiracy amongst talking heads and futures markets that economic events and statistics are immediately reflected in real-time price action in the bond markets, dot plots, and other dynamic markets. The Fed will often talk up its view, and by the time they do take some action on rates, it’s hardly a surprise. This is, of course, by design. The Powell Fed believes in transparency and no … Read more

Insider Buying Week 2-17-23

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When I started developing the Insiders Fund’s strategy in 2001, I knew I would miss out on some of the all-time greatest investments since founders of disruptive companies are loaded to the gills with their own company’s stock and don’t need to buy more of it. That was all right with me. I was willing to miss the potential home runs if by avoiding companies without insiders buying, I could avoid the scams, frauds, and charlatans that populate the financial world.  Generally, crooks and cons don’t buy their own stock, but there are exceptions to that as well.  Insiders may … Read more

Insider Buying Week 2-10-23

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When I started developing the Insiders Fund’s strategy in 2001, I knew I would miss out on some of the all-time greatest investments since founders of disruptive companies are loaded to the gills with their own company’s stock and don’t need to buy more of it. That was all right with me if could forgo this “pot of gold” and by doing so avoid the scams, frauds, and charlatans that populate the financial world.  This week we have the rare insider buy at a potential pot of gold, Vicarious Surgical, a true med tech disruptor.   Name: John Morici Position: … Read more

Stock market Pundit Mike Wilson gets Egged- Insider Buying Week Ending 2-3-23

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Morgan Stanley’s head of equity strategist Mike Lee stood out from the herd last year calling the market sell-off in 2022. Not only did he get it right, but he also stuck with his guns and didn’t back down during the many gut-wrenching bear market rallies last year.  He’s been bearish since the market rally last Fall and has doubled down on what is turning out to be one of the most embarrassingly bad and brazen market calls I’ve heard in some time. He’s not alone, though. Almost every pundit I read or listen to, says the same thing. Don’t … Read more

Animal Spirits and the Doomsday Clock are on a Collision Course-Insider Buying Week 1-27-23

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Not one of the many podcasts and pundits I listen to predicted a rally of 16% magnitude since the October lows. The January rally to date has been raw animal spirts. Obviously, this can’t keep going with the Fed dangling 5% risk-free returns out there.   Insider buying is incredibly scarce, even considering the seasonal effects of quarterly earnings blackouts.  This is what interested me last week in the thinly populated world of insider buying. The most exciting event is the new bubble forming around AI, capped off by Microsoft’s $10 billion in investment in OpenAi’s and  their overnight ubiquitous quantum … Read more

Getting the big things right-Insider Buying Week 1-20-23

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Following insider behavior closely was not a very successful strategy last year. They got a lot of things wrong.  Not too surprising when you look closely at it. Insiders may know their companies far better than anyone else, but their macro crystal ball might not be better than yours or mine.  Last year had two black swan events, a proxy war between the West and Russia over the invasion of Ukraine and rapidly rising interest rates.  The investment strategy that shined last year was global macro. After many years of relative underperformance global macro rose to the top.  Getting these … Read more

Insiders Boycott Record S&P 500 Run

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Insiders have for the most part boycotted this ~14% S&P bull run from the October lows to this January’s 4% advance MTD. There were hardly any meaningful insider buys.  Yes, there were a few 10% holder purchases, but these are mostly hedge funds that have shown remarkably bad judgment.  For the most part, they look like they are just averaging down.   Name: Antonio Pineiro Position: SVP Chief Int’l Dev Ofc Transaction Date: 2023-01-13 Shares Bought: 3,000 Average Price Paid: $42.54 Cost: $127,632 Company: Dave & Buster’s Entertainment Inc. (PLAY) Name: Ashley Zickefoose Position: SVP Chief Marketing Officer Transaction Date: … Read more

Insider Buying Week 1-6-23 When does the Bear Market End?

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All bear markets end with a crescendo of insider buying. There are a few ways to predict this pivotal event. The most reliable I have found, the ratio of insider buying to selling, can be found at popular subscription services such as secform4.com.  I’ve included a few charts from the site to help illustrate this phenomenon of insider buying foretelling the end of the bear market. I wouldn’t expect too much buying at the moment, though, as we’re deep in the throes of the 4th quarter earnings blackout when insiders are restricted from taking advantage of these reduced prices.   But … Read more

Notable CrowdStrike $CRWD Insider Buy Week 12-30-22

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Following insider behavior closely was an excellent way to avoid some of the technology investing disasters in 2022.  Darlings of the past decade—namely technology stocks—were hammered last year. The S&P 500 and Nasdaq plunged into a bear market as the Federal Reserve decided it didn’t want its legacy to be runaway inflation.  Their record interest rate hikes crushed demand and continues to dampen interest for risk-sensitive assets. We’re now deep in the throes of the 4th quarter earnings blackout when insiders are restricted from taking advantage of these reduced prices.  Even if we weren’t, I don’t think there would be … Read more

The Fed Gives a White XMAS to Seniors Noteworthy Insider Buys 12-23-22

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After years, decades even of financial repression, investors are able to earn something from their risk-free savings. It could not have come at a better time for the nation’s seniors. According to the  2022 U.S. Census Bureau, more than 56 million adults ages 65 and older live in the United States, accounting for about 16.9% of the nation’s population. It’s time for them to step down off the roller coaster ride of the equity markets.  One of the cardinal rules of financial planning is that you get more risk-averse as you age. Now you can actually earn a return of … Read more

Insider Buying Week 12-16-22 CRONOS Up in Smoke?

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The Biden administration may be the savviest market timer on or off Wall Street this year.  The widely scoffed-at and criticized announcement on March 31 stated that the administration would start selling oil from the nation’s strategic petroleum reserves.  It sounded like a cheap trick to influence voters upset about high prices at the pump for the Midterm elections. At the time, the price of a barrel of West Texas Intermediate Crude hovered around  $98 per barrel and has gotten as high as $110.  Friday’s close of $74.50 represents a short seller’s return of over 35% in less than nine … Read more

Something for Everyone Insider Buying Week 12-2-22

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Learn How You Can Become an Insider Too – Click Here For the first time in over a decade, fixed-income investors are enjoying reasonable returns.  The Fed seems intent on keeping rates high for longer than stock market participants might like, but it hasn’t yet done great damage to the hopes and fortunes of equity owners. What I mean by this is to look at the 10-year Treasury, the benchmark index which stock market returns are said to compete with.  The long-run average annual return of the stock market average is 7%-9% per annum. That still provides a measure of … Read more

Insider Buying Week 11-25-22 Cronos Group up in Smoke

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Learn How You Can Become an Insider Too – Click Here This is the best time of year to be invested, statistically speaking. Why that is, no one really knows for sure.  Perhaps it has something to do with animal spirits, people feeling good about themselves, others, who knows?  Animal spirits can’t be overrated.  People are more likely to bet on the future when they feel good about the present. This statistical stock market tailwind isn’t as strong in bear markets, though. The future for most people is just the day after tomorrow and doesn’t look that different than today.  … Read more

Massimo and Apple Showdown coming soon to a screen near you-other notable Insider Buys

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Learn How You Can Become an Insider Too – Click Here   The reality of significantly richer returns on risk-free assets like U.S. Treasuries has taken hold of investors’ psyches. The marginal excess returns that the stock market is likely to provide over the 10 Year Treasury are still mildly attractive. Considering the historic return of the stock market is 7.5%-8%, is the 3.7% to 4.18% risk premium above yesterday’s 3.82% 10 Year Treasury Yield worth it?  For some retired investors losing sleep over the market’s gut-wrenching volatility- the answer is clearly no.  Years of financial repression are over for … Read more

Insider Buying Week 11-11-22 Inflation is Dead- The War is Over- The Dems hold the Line

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This week’s Insider Report marks the end of an experiment with a paid subscription service. From here on out the Insiders Report is free and I am relieved of my weekend chores. I’ll still continue to blog on insider buying and selling as my time permits. I’ve written numerous times that all bear markets in the last 20 years have ended with a crescendo of insider buying.  The number of insiders buying picked up dramatically last week some with household names like Boeing and CME Group.  There are finally some reasons to be hopeful that this miserable year of investing … Read more

‘s Really Quite Simple Buy Guns and Gas-Insider Buying Week 11-5-22

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A miserable week, down 3.46% for the bulls ended on a positive note on Friday. The narrative that the bottom was in now seems shaky as stalwarts AMZN, APPLE, MICROSOFT, ALPHABET, and  FACEBOOk all plumb new lows. One thing for certain, the hurdle rate for stocks and all things investment-related is much higher. The 10 Year Treasury yield of nearly 4.5% and the Prime rate of 7% are the new realities. We ain’t going back anytime soon to the halcyon days of near-zero interest rates. I keep repeating my mantra- All bear markets in the last 20 years have ended … Read more

”s Driving the Market Higher-Insider Buying Week 10-28-22

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The Dow had its’ best run in over 40 years. Major stock indexes extended a stunning October rally on Friday after tech giants Apple and Intel broke a streak of dismal third-quarter earnings reports. The Federal Reserve’s ongoing tightening campaign threatens to slow the economy down through at least next year. This may be a historic rally, but it is notably absent of insider buying.  The few buys that there were produced some handsome gains, notably from the issuance of the stub Biohaven and its spot secondary that closed the week, 46% higher. All bear markets in the last 20 … Read more