As market rallies, top execs dump shares at heated pace

From the files of “duly noted:”

June 22 (Bloomberg) — Executives at U.S. companies are taking advantage of the biggest stock-market rally in 71 years to sell their shares at the fastest pace since credit markets started to seize up two years ago.

via Insiders Exit Shares at the Fastest Pace in Two Years (Update1) – Bloomberg.com.

Bloomberg further notes that top executives at S&P500 companies have been net sellers for 14 weeks. And, in case you weren’t quite sure what this signifies, here’s a quote from the requisite expert:

“If insiders are selling into the rally, that shows they don’t expect their business to be able to support current stock- price levels,” said Joseph Keating, the chief investment officer of Raleigh, North Carolina-based RBC Bank, the unit of Royal Bank of Canada that oversees $33 billion in client assets. “They’re taking advantage of this bounce and selling into it.”

Duly noted.

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3 thoughts on “As market rallies, top execs dump shares at heated pace

  1. First it should be noted that economics science or art alludes me. Yet I have heard some whispers about something called the Working Group on Financial Markets a creation of Reagan after the ’87 crash. Admittedly I don’t know if they are still functioning but their purpose was to prop up the stock market by bidding up future averages. Was it ever used? I dunno. However it the market was pumped by the invisible hand to stabilize the market, dumping by insiders is not a good indication that the strategy is a permanent fix.

    So, Nancy, as an expert, what do you think?

    • In 1988 Reagan established something called the President’s Working Group. It was set up to restore investor confidence. But since it is a pretty secretive group — no published minutes from meetings — there are some people out there who think its job is somehow to manipulate markets. If that’s the job of the PWG it’s certainly not very good at it. As far as I’m concerned, it’s not worth giving much thought to. In his new book Bailout Nation, Barry Ritholtz gives a pretty funny description of the PWG and its ineptitude.

      • damn another good conspiracy gone to hell…well maybe Grisham can make something of it.

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