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Michael Delaney » Comments » BAX

  • 5 Anomalies in the Current U.S. Markets [View article]
    DI,

    I agree that a disproportionate amount of the daily volume is in junk like AIG, Citi, Fannie, Freddie, etc. But this volume is not being generated by corporate officers "dumping and running". It is being generated by gunslingers and hedge funds who find opportunity in high volatility areas to make money both long and short (sometimes in the same day!). I sincerely hope that a very insignifificant portion of the volume is an average citizen investor who says to himself "AIG sure is cheap. I think I'll buy some for my 401(k) and hold it for a few years".

    There are dozens of reasons why corporate officers would want to sell. Maybe they had stock options about to expire and needed to exercise them. Maybe they found that great house on the beach in Costa Rica and need a few million in cash. Maybe they just need to diversify. But there is only one reason why corporate officers will buy more of their stock on the open market. And they should know their company's future prospects better than anyone else. When you find a company like that, it's a gift.
    Sep 01 18:31 pm |Rating: 0 0 |Link to Comment
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