The Difficulty in Handicapping Insider Selling
Editor's Note: Minyanville is a community of people who share an interest in fiscal literacy. As perspective is an important aspect of our daily routine, we share this email with hopes that it adds balance to your process.
I owned a bunch of Gap (GPS) puts which I luckily (and I mean luckily) sold last Thursday. Anyway, I'm looking to get back in, especially if this takeover thing is truly just rumor. Anyway, I've noticed a fair amount of insider selling going on for weeks from the Fisher family. Granted, they still own a lot but it's odd to me that they and the rest of the board authorized additional share repurchases and they kept selling shares. What is your gut with what's going on?
Thanks. Your stuff is always very insightful and I look forward to hearing you at MiM2.
The Fisher family (only one is an executive) began selling in earnest more than a year ago. This could be for many reasons; they claim it is for charitable interests. So if they have especially picked up some selling recently, I don't know what we can read into that. It is more useful to track insider selling when a "diverse" group of insiders begin to sell.
It is difficult for me to handicap these types of things, per my comments earlier. Although I do not think an LBO in many of these situations makes long term economic sense, that doesn't stop them from happening. It is all a function of liquidity forcing people to take more risk. Scott's main thesis is that enough is enough and soon, because of high debt, the velocity of money will slow to the point that people take less risk.
So I may be the last person you want to ask.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter