The Insider Alert

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Edited by Alexander Green, this trading services recommends stocks that are experiencing insider buying.

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Posted by Sumflow on Dec 10, 2011 @ 8:00 pm

November was marked by an exposé on “Congress – Trading stock on inside information,” shown on the “60 minutes TV news and advertisements show,” see: http://www.cbsnews.com/video/watch/?id=7388130n

This led to a congressional hearing on “Congressional insider trading information,” see: http://www.c-spanvideo.org/program/InsiderTra.
The loophole in which members of congress and legislative staffers are immune from enforcement of insider-trading laws, is because the delayed reporting of securities transactions by congress, defeats, obstructs, and impairs its use as timely evidence. Insider-trading cases are hard to prove, because the trades must be tightly linked to the events or information on which they are allegedly based. Trades need to be disclosed in “real time or near real time,” so that the memories of potential witnesses are fresh and suspects do not have time to cover up their actions. The SEC, which conducts most insider-trading investigations, urged faster disclosure of stock trades by members of Congress on electronic, searchable forms. This is why no Congress people were investigated under the current laws.

The media and congress consider the same group of insiders that we monitor, the benchmark of excellent trading in the stock market. If they succeed in getting congress insiders to report promptly, just as corporate insiders do now, this will just be one more tool we can use to continue to out perform the insiders ourselves.

Coming into this week my leading insider stock is up almost 17%, another 11%, almost 6% on the third, 2% and our last purchase is down 5% with a bullet. Two options, which I did not take, were half cashed out up over 100%. My experience is that a few options come in, but they do not make enough to cover the expense of buying them all as recommended.

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Posted by Sumflow on Oct 28, 2011 @ 6:31 am

Lets see what we have learned following the corporate insiders who trade, to make money in there own companies shares, with their own money?

All of our positions are in the money. The Insider Alert continues to buy leading financially sound companies, growing and marked by significant insider buying. We don’t need to predict how or when this situation in Europe will all play out. The companies we own are set to report sharply higher earnings in the weeks ahead, and the executives who run them have been eagerly buying there own shares. That’s what is important. No one knows better about there own company than the insiders, who live and breathe inside those companies.

These individuals have access to all sorts of material, non-public information about the company’s. Insider buying shows that they believe they are is undervalued, and set to rise soon. All we have to do is to look at what top executives are buying with their own money at current market prices. This is especially true when the buying is enormous.

So let’s take a reality check on our portfolio. Every company in the portfolio is profitable. All of them pay dividends. And each has significant recent insider buying. Of the five insiders stocks in our portfolio now. One is up 20%, one is up 12% another 8%. All of them have profits. At a time when T-bills sell for less than a third of one percent.

We have seen that Insiders do know when to buy there own stock, with there own money.

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Posted by -o0(GoldTrader)0o- on Sep 1, 2011 @ 9:13 pm

Not only were we stopped out of everything; we had stops take us out of some the same day that we got in. But like all markets each trough leads to another crest. That is why we use stops. This just shows the importance of putting stops on as soon as we get the fills. The insiders know what to buy but they are by no means masters of technical analysis. That is not why we follow them. It is for some short term, unknown, unexpected event that may not have happened yet. Being on the trail of insiders negates the effect of market timing. When the market makes its move we will be there. A reduced position perhaps but we will still be around at the finish.

So, this past month we are building our portfolios back up. Coming into September we have three new positions on with unrealized gains of 5%, 4%, and 3%. We will be running the risk of inadequate diversification for a few more weeks as we incrementally build up the number, as well as the size of our positions.

As a new subscriber I was faced with the decision weather to go into everything on one day, on one open, or take each new trade as it was discovered. This year we do not have the luxury of that choice. Each trade as alerted is the only choice in the system. At least from experience we should have a good idea of the maximum position size for each stock.

In essence, after being stopped out, subscribers are building diversification into new portfolios with profits in all stocks.

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Posted by -o0(GoldTrader)0o- on Aug 8, 2011 @ 10:00 pm

The Insider Alert has a policy of staying full invested. Currently the trailing stops have us unvested in just about everything. I am sitting with cash.

So, do Trailing Stops Really Work?

One of the most controversial aspects of The Insider Alert’s investment policy is trailing stops. Flying by the seat of your pants, rarely leads to superior investment performance.

Trailing stops in this case seem to be protecting our profits, and in all cases our trading capital.

Finance professors – researched the performance of money managers who oversee pension funds, endowments and high-net-worth accounts. Institutional managers who fared best were those with restrictive rules that didn’t allow much leeway for holding stocks for emotional reasons. Managers who relied on “flexible” sell strategies did far worse.

The culprit is almost always pride, ego, or emotion. Without any kind of sell strategy, emotions come into play. And emotions are almost always wrong. Alex says, by adhering to a disciplined trailing stop strategy, The Insider Alert’s investment system mows down emotion-driven trading errors like a field full of dandelions. It cures greed. Eliminates fear. And does away with wishful thinking – as in, “I hope this stock turns around and starts going the right way.”

Trailing stops serve two purposes…

• They make sure we never let a small loss become an unacceptable loss.

• They keep us from selling stocks while they’re still trending up.

When we run relatively close stops as these 20%. A stop out only takes a 25% rise to get even. A figure many of our stocks have attained. But if your drawdown were to go to 50%. It would take 100% to break even, which is entirely a different thing. We see 100% in The Insider Alert’s option trades all the time, but not stocks.

The one knock against using trailing stops is that unscrupulous market makers will sometimes take out your stop order right before a stock takes off. This has not been the case with The Insider Alert’s stops. We get the trade after they run the stops. The work around for this of course, is to have an alert sent to you that does not enter sell orders in the actual market. You can enter the stocks you own, the price you paid and the percentage-trailing stop you want to use. If any of your stocks close beneath your selected stop, you can be notified and you can place the order to get out on the next opening.

The Insider Alert starts out at 20% and gets moved up to 15% or sometimes 10%. Alex says the key is to make sure you have an acknowledged point where you’d be willing to sell any individual stock. Trailing stops don’t just offer to cut your losses and protect your profits. They guarantee it.

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Posted by -o0(GoldTrader)0o- on Jul 1, 2011 @ 9:05 pm

This letter is based on The Peter Lynch philosophy of insider trading: > Insiders might sell their shares for many reasons, but they buy for only one: they think the price will rise.”

Insiders sell their own companies’ stock for thousands of reasons. They might need a big hunk of cash for something personal like a new house or yacht, or they could paying off a mistress, or just plain giving it away. Sometimes insiders sell as part of a planned selling program, which allows them to sell stock in stages instead of selling all at one price. They could be lightening up because they think, the stock may be overvalued. Some even dump their own stock because they have inside knowledge that a competitor is gaining market share.

The seller has thousands of good reasons, the buyer only one. Insiders buy shares in there own companies when” they think,” the stock is going higher.

How insiders think is really not our concern but their track record after they have purchased before, is. Insiders trading as a group deserves an even closer look. It is the act of buying that tips us off that our person on the inside sees or feels something positive. Just because they think it will go up doesn’t mean it will. If the market doesn’t agree with them, it could end up going nowhere.

It is big money that drives stock prices, not insiders. Technical Analyses can help you see this activity on the chart. It is the big money coming in after the insider that makes the price gap up in value. By following selected insider-buying activity; we can get in before the instructional investors are through.

Peter Lynch: > the insider has only one reason to buy: to make money.

Recently we received a third signal from the inside. We were cautioned because there was, “no recent insider buying.” Jessie Livermore taught us, “The absence of insider support is generally accepted as a pretty good bear tip. If insiders don’t buy their own stock on reactions, who should?”

The markets have gotten so big that we can hardly look to insider buying to provide support. If the insiders think this company has a play, they will resume buying, we will be alerted, and can get back in if we are stopped out.

The race is not to the swift, or the battle to the strong, nor does food come to the wise, or wealth to men of understanding, or favor to men of skill … but that’s the way to bet.

The emerging strategy is to accumulate stocks that show recent insider activity that are likely to go up in subsequent weeks. Many stocks rotate through this select group, some repeat, many are new. When we get stopped out we are out, until some insider makes his move, then we might get in.

How do you tell the difference between a piece of rope laying on the ground and a snake? No movement, no snake.

Similarly how can you tell a dead stock from one that is about to make an unexpected move? No insider activity, no position. Results have shown that insider stocks traded according to this proven strategy as a portfolio, will out perform.

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