Insider Trading We REALLY Don't Want to See

I listen to a lot of investing podcasts these days and most of the guys I listen to will tell you that insider activity can often assist in figuring out whether or not a stock is going to trend up or down. For instance, when a stock is getting ready to IPO and all of a sudden 20% more shares open up (can anyone guess my example?), it usually means a lot of initial investors are ready to get out! While real insider activity is interesting and useful, I would rather go through hypotheticals that are funny and provide no real education to my viewers. So here we are.

Insider Move #1

Insider Activity: Members of congress begin buying massive amounts of Raytheon stock. 

While it wouldn't be surprising if many congressional members already own tons of defense stocks, based of their protectionist attitude towards defense procurement, massive buys can only mean one thing: WAR WITH IRAN!!! Raytheon creates cruise missiles, which since America tends not to like the negative pub of soldier fatality, would rather launch a shit ton of Raytheon's own Tomahawk Cruise missiles.

Insider Move #2

Insider Activity: Center of Disease Control Scientists invest in Smith and Wesson holdings as well as Hostess

What do ammunition and twinkies have in common? They make great companions during the ZOMBIE APOCALYPSE! When stock in a zombie wasteland there are 2 things every Walking Dead fan knows: you can never have enough bullets and having anything you can eat without creating fire is always a plus. Now, you are probably thinking, why would anyone buy hostess when there are a ton of  other stocks that would provide real nourishment? You have to think like the market! When you think of food lasting forever, what do you think of? Twinkies!!!

Insider Move #3

Insider Activity: Warren Buffet buys copious amounts of Baidu stock, reduces his position in Google.

This one is simple: China is taking over the world. As any investor knows, when Buffet buys he tends to know what hes doing. Buffet usually invests in relatively safe, large cap stocks which are normally not like Baidu (Chinas largest search engine), so its a sign of the death of capitalism. Everyone make sure to buy plenty of red clothing!


Insider Move #4


Insider Activity: Bobby Brown buys large volume of Coke stock

This likely means that Bobby Brown discovered the internet and decided to research the stock market: good for him! Warren Buffet told him to buy stocks that he believes in and he did.

Final Note


While my previous text was all fun (hopefully) and games, it is important to take into account insider activity for a company. When stocks are down and those who run the company are purchasing more stock options, it usually means they think the down is a temporary one. They know the company and financial specifics more than anyone, so they can give away a lot of information. Joel Greenblatt, author of "You Can Be a Stock Market Genius" talks about how when looking at potential trading, insider trading is a big factor in his decision making, especially when it comes to unknown entities like spinoffs and mergers.