Management buying is not always a good sign, although I think it most often is. Sometimes, a CEO or Board member steps up when they believe the share price has been under unfair attack and they want to send a message. They can afford to lose what they invest, and are counting on the public not looking into the details.
Similarly, a sale is not always a sign of bad news. Because equity compensation is by far the largest component of most senior managers' pay, all but the independently wealthy need to sell shares from time to time.
If it's a company one follows, a careful investor can usually read enough between the lines to figure out when buying means good things (or not) and when selling means bad things (or not)
Management buying is not always a good sign, although I think it most often is. Sometimes, a CEO or Board member steps up when they believe the share price has been under unfair attack and they want to send a message. They can afford to lose what they invest, and are counting on the public not looking into the details.
Similarly, a sale is not always a sign of bad news. Because equity compensation is by far the largest component of most senior managers' pay, all but the independently wealthy need to sell shares from time to time.
If it's a company one follows, a careful investor can usually read enough between the lines to figure out when buying means good things (or not) and when selling means bad things (or not)
Thanks for the insight, James. I'm taking your comment seriously, given that you used to work for an S&P 500 company.