BALTIMORE, Nov. 27 /PRNewswire/ -- www.Growthstockwire.com
The following statement was written by Graham Summers, who is a frequent
contributor to http://www.growthstockwire.com, a free daily e-letter that
updates readers on the most profitable opportunities in the global stock,
currency, and commodity markets.
In light of the current market's madness, it's time to revisit our old
friend Iceberg Slim.
Iceberg Slim reached infamy as one of Chicago's most successful pimps. By
the time he retired at the age of 42, he'd amassed a fortune. According to his
publisher, he went on to sell more than 6 million books. He later attributed
his success to maintaining his cool in any and all situations. "The best
pimps," he wrote, "keep a steel lid on their emotions and I was one of the
iciest."
It's advice we could all do well to heed right now ...
There's been a fundamental shift in investor sentiment since this summer.
This time last year, the market was unstoppable, rallying day after day. Bad
news only resulted in a slight hiccup - if it did anything at all.
Today, however, investors have little confidence in the market. In fact,
they're more worried than they've been in more than three years. I'm looking
at the Chicago Board of Options Volatility Index (VIX): the bellwether for
investor confidence.
When the VIX spikes, investors are nervous about the market's future, and
they bid up the price of "insurance" in the form of options. When the VIX
plummets, investors are calm. I can see from the chart, investors are not
"keeping a steel lid on their emotions." Instead, they're spooked, big time.
Corporate insiders, on the other hand, are taking a page right out of
Iceberg Slim's book, and calmly buying in the face of these corrections. The
sell-to-buy ratio for the last week was a bullish 1:14 -- anything below 1:20
is bull territory. In terms of actual insider buyers and sellers, there are
1.5 sellers for every one buyer: again, very bullish.
These guys aren't traders, nor are they looking to make a quick buck.
Because of the short-swing profit rule, insiders are required to hold on
to the shares they purchase for a minimum of six months. So the guys who are
buying right now aren't short-term traders. They're seeing value no one else
is, and they're looking to hold their positions well into next year.
So while everyone else panics, the guys who run these companies are slowly
loading up on the two most beaten up sectors: finance and consumer
discretionary. Does this mean we'll see a big year-end rally in these sectors?
Not necessarily. But insiders are definitely betting that their businesses
will do well.
Good trading,
Graham Summers, editor, International Strategist and contributor to
www.GrowthStockWire.com
SOURCE www.Growthstockwire.com
Annie Greer, Marketing Manager of www.GrowthstockWire.com, +1-410-864-1713,
agreer@stansberryresearch.com
