Why aren't the insiders, the people who know the most about the company and the industry and the market they created, buying and holding
The insiders have some privileged information about their businesses and technologies -- but none whatsoever about the market and its prevailing valuations. Like any sentient beings, they are risk-averse, especially since they have great piles of cash in these stocks. They sell just like anyone else sells, because of a CYA mentality, and not because of some sinister backroom plot.
By the way, at the stock-by-stock level, several studies have tried hard, but utterly failed, to show any predictive power in insider buying/selling. Again, this is stock by stock, not the market in general. I don't know of any rigorous studies of insider selling vs levels of broad indexes.
I would venture to guess that for the market in general (as opposed to specific stocks), insider selling is a realtime indicator of current market sentiment -- insiders step up to sell just like anyone else steps up to sell -- and not a leading indicator. |
