FYI: Corporate insiders are giving the stock market the benefit of the doubt, despite the market’s early-October plunge.
For the record, I should stress that the insider trading to which I refer is the legal kind: transactions by a firm’s officers, directors, and largest shareholders, and reported promptly to the Securities and Exchange Commission. It’s possible by slicing and dicing the SEC data to come up with portfolios that, generally, have beaten the market by a significant margin.
Yet the past several years have been difficult for these insider-based strategies. Consider three mutual funds that have based their stock selection on the behavior of insiders. As you can see from the accompanying table, they have mostly lagged the S&P 500 SPX, +1.42% in recent years. (The table’s data is courtesy of investment researcher Morningstar.)
Regards,
Ted
https://www.marketwatch.com/story/corporate-insiders-are-taking-the-stock-markets-big-selloff-in-stride-2018-10-12/print
