Insiders Are Selling But The Big Question Is Why

Are insiders losing confidence in the stock market? Last week, the Vickers Weekly Insider Report noted that its average eight-week ratio of sales to purchases of stock by corporate insiders had jumped to 3.29, and in the latest reporting week the sell-buy ratio has risen again, to 3.81. Since any ratio above 2.25 suggests that the market is headed for a decline, the latest numbers are hardly reassuring. "We have been recording an unsettling loss of enthusiasm among insiders for shares of their own companies for some weeks now," says David Coleman, who tallies the ratio.

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