just in in-tray
player #1: largest buying / selling in the top 10 sectors (meaning that it usually undercounts selling).
This week, there was insider buying in only 7 sectors, the first time I've ever seen no buying in less than 10 sectors.
online.wsj.com
The buy / sell ratio for last week was 154 dollars in sells for every dollar in buys....another record if I recall correctly.
Insiders are saying this market is "not cheap."
player #2: which it isn't (cheap, i mean). actually, apart from the manic valuation high of early 2000, which was a once-in-ten-generations statistical outlier, the market has rarely traded at a trailing p/e higher or close to the current one. most of those instances coincided with major market tops.
the loud chorus of rationalizations using 'forward earnings' to evaluate the market is by itself a big warning sign that the market is very expensive (you don't need to rationalize valuations in a truly cheap market after all).
analyst earnings estimates are never much more than a linear extrapolation of the most recent half-yearly trend. they ultimately tell us exactly nothing about future earnings, as that would require said analysts to know the future, which is of course unknowable (they only tell us something about the expectations that are priced in right now).
since most of them simply extrapolate recent trends, it can also not really be called an intelligent speculation on said future.
so it's basically worthless information, but it has become the centerpiece of the rationalizion of the urge to buy stocks at current inflated prices. the idea that the market should be valued on 'forward earnings' has become so ingrained lately that one often comes across media reports in which these estimates are presented as if they were already a reality. of course, even if these estimates were prove to be correct, then the market would be at a mean valuation provided it actually stayed flat until those earnings estimates prove to be true.
so if the estimates of a future mean valuation based on current prices are used as an argument to buy now, it is akin to saying: 'we definitely expect the market to become overvalued at point X in the future' (based on what will be the trailing p/e's then).
however, it is already overvalued, using trailing p/e's. in addition, stocks do not always 'obey' and follow their earnings trend in the medium term - see attached chart.
the current expectations, which are wildly optimisitc, are actually a potential set-up for disappointment - especially as we can actually make empirical statements about the likely long term returns provided by buying into an overvalued market based on its trailing p/e - which are usually rather poor.
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