Insiders are NEVER wrong!
?.Beware of the Big Board
September, 2009
NEW YORK (Fortune) -- Can hundreds of stock-selling insiders be wrong?
The stock market has mounted an historic rally since it hit a low in
March. The S&P 500 is up 55%, as U.S. job losses have slowed
and credit markets have stabilized.
But against that improving backdrop, one indicator has turned distinctly
bearish: Corporate officers and directors have been selling shares at a
pace last seen just before the onset of the subprime malaise two years
ago.
While a wave of insider selling doesn't necessarily foretell a stock
market downturn, it suggests that those with the first read on business
trends don't believe current stock prices are justified by economic
fundamentals.
"It's not a very complicated story," said Charles Biderman, who runs market research firm Trim Tabs. "Insiders
know better than you and me. If prices are too high, they sell."
Biderman, who says there were
$31 worth of insider stock sales
in August for every $1 of insider
buys, isn't the only one who has taken note. Ben Silverman, director
of research at the InsiderScore.com web site that tracks trading action,
said insiders are selling at their most aggressive clip since the summer
of 2007.
If the insiders are bailing the market is headed for another
correction (glaring exception, of course will be the gold stocks).
US
federal deficit climbs higher into record territory, hits $1.38T
The soaring deficits have raised worries about the willingness of
foreigners to keep purchasing Treasury debt. The Chinese, now the largest
foreign owners of U.S. Treasury securities, have expressed concerns about
runaway deficits.
Peter Schiff: ?The
Chinese government is encouraging its citizens to buy silver and gold
because officials know the value of these precious metals will rise. The Chinese are trying to divest
themselves out of the US dollar, which means silver and gold have to go
up and they want their citizens to have real money.?
The UN
Pitch for a New Currency
A dreadful idea, but one that is gaining traction. The dollar?s role in
international trade should be reduced by establishing a new currency to
protect emerging markets from the ?confidence game? of
financial speculation, the United Nations said.
UN countries should agree on the creation of a global reserve bank
to issue the currency and to monitor the national exchange rates of its
members, the Geneva-based UN Conference on
Trade and Development said today in a report.
China,
India, Brazil and Russia
this year called for a replacement to the dollar as the main reserve
currency after the financial crisis sparked by the collapse of the U.S.
mortgage market led to the worst global recession since World War II. China,
the world?s largest
holder of dollar reserves, said a supranational currency such as the
International Monetary Fund?s special drawing
rights, or SDRs, may add stability.
I cannot imagine a world where the US dollar is no longer
recognized as the currency of choice and safety. That being said, my readers must
first take care of themselves and their families. As repugnant the
thought that our beloved US dollar is in collapse must be set aside and we must look at the
only safe haven?the
historic safe haven of gold and silver.
Both of our standards of
living are in peril?US and Canada
Look
around you. This may be as good as it is going to get for the next
fifteen years, thanks to the multi-year accumulation of debt, compounded
by the inept measures put into place by politicians on both sides of the
aisle. As to the current gang
of economists in Washington,
it is important for us to remember?.that
unlike all of us, not one of these bozo?s have
run a business or had to meet a payroll. Even still, their experiments (at
our expense) cannot be considered successes. The ?cash
for clunkers? program is a case in point. The
ripple effect of small automobile shops that are forced to lay off
mechanics due to a lack of cars to repair. Most ominous ?
no one in Washington
has a plan to cut taxes, slash spending or reign in the debt. Could it be
that the economists in Washington
are smart enough to realize that we have passed the tipping point and
there is no way the debt can be paid back?
If so,
what is stopping Washington from
emulating China
and encouraging their citizens to buy gold and silver, thereby
demonstrating true concern for our well being? The whole fiat currency versus
gold and silver debate to one side?.what
about the simple decency of taking care of their fellow citizens? If you
are a ?leader? ? lead,
for goodness sake!
For those
Americans who are voting with their feet and coming to Canada ? welcome! But it is important to realize
that Canada?s export business will
suffer from lower demand in the US. Canada
relies on the US
for over 70% of its exports. Thus,
as the US dollar loses value due to the hard inflation coming our way,
the Canadian dollar will rise.
But think about that.
Exports into the US
will become more expensive at exactly the same time that the citizens of
the US
are in the grips of massive inflation. This will lead to the Canadian
government also printing dollars to keep the Canadian dollar from rising
to much against its US
counterpart. This in turn will lead to hard inflation in Canada.
Remember our plan: Stay in the business of gold. Buy
(physical) gold and silver and tuck it away. Invest in publicly traded
companies that are all about gold and silver. Every time you take a
profit, reinvest part of your gains into physical gold and
silver. Repeat again and again. I thought we had a couple of years
left to weather-proof our house and fully stock our pantry. I?m no longer sure if that
is the case. Time may not be our friend.
Larry Myles
Larry Myles Reports
"Capitalism is the only system that can make freedom,
individuality, and the pursuit of values possible in practice."
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