Chapter 5. Follow the Insider
“The insider has only one reason to buy: to make money.” | ||
| --Peter Lynch | ||
The insider is king. In stock investing, corporate insiders and investors with huge equity stakes have a tremendous advantage over the outsiders, especially the individual investors. This chapter’s maxim, Follow the Insider, shows how outsiders can cut into that advantage by doing what the insiders do.
The professional investors—including investment advisors and private equity group, hedge fund, and mutual fund managers—pay special attention to what insiders are buying. Peter Lynch, one of the top investors of all time, formerly of Fidelity Management, acknowledges that watching the insiders helps him pick stocks that often hit home runs. (More ...
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