Insiders’ View On Recovery: V, U or W?


Historically there have been three types of recovery: the quick V, that everyone hopes will happen this time, the prolonged U that experts think is most likely and the blood-chilling W, that everyone fears most.

If you are looking for an optimistic prediction, don’t consult the insiders, who are tripping over each other trying to sell shares of their own companies. The market level view is the gloomiest we have seen in a long time with the buy ratio of only 29%. This is the breakdown of summarized insider sentiment across 20 industry groups:

– 17 “strong sell”
– 10 “sell”
– 2 “reduce”
– 1 “hold”
– 0 “accumulate”
– 0 “buy”
– 0 “strong buy”

So are insiders predicting the W? I wouldn’t rush with this conclusion, since they have been holding off their sales for the last two years, while the kids still need to go to college and the beach house is still as desirable. So, it would be curious to see if the selling levels off in the next few weeks.

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