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To: MythMan who wrote (256317)8/18/2003 11:04:30 AM
From: Lucretius  Read Replies (3) of 436258
 
creamer says "buy um"

More Factors Than Fear Drive Insider Sales

By James J. Cramer
08/18/2003 09:20 AM EDT
Click here for more stories by James J. Cramer

Market Analysis
Corporate insiders have learned along with investors that greed costs.
Higher prices could be driving insider sales.
Assuming that fear of losing gains is the only reason behind inside sales is wrong.




Corporate insiders are like you and me. They don't want to give back their gains. They, too, have learned from the past. They have that new, positive casino mentality -- take something off the table -- that didn't exist in the 1990s.

I write this not from a "don't worry about insider selling" viewpoint, but more of a recognition that greed cost you so much in the last go-round with the bull that it's human nature to expect more selling as prices rise. The idea that there is more insider selling now than at any time in the last year makes sense: Prices are higher now than at any time in the last year.


That, plus the lowering of capital gains rates, has insiders thinking, "Better take some profits now before they are taken away."

I have never put much stock in following "insider selling" as a method of making money. I always put a lot of stock in insider buying. You only buy for one reason: You think your stock is going higher. You sell for a million reasons: debts, options that might otherwise be lost, estate planning and a fear of losing gains.

The articles and columns being written right now presume that only the latter is the raison d'etre.

That's just false, and it's the reason I simply refuse to turn less enthusiastic about the market after reading these stories.
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