Chapter 20
Corporate and Government Skullduggery: Looking at Insider Activity
In This Chapter
Using documents to track insider trading
Examining insider buying and selling
Understanding corporate buybacks
Breaking down stock splits
Watching Congress closely
Imagine that you’re boarding a cruise ship, ready to enjoy a hard-earned vacation. As you merrily walk up the plank, you notice that the ship’s captain and crew are charging out of the vessel, flailing their arms, and screaming at the top of their lungs. Some are even jumping into the water below. Pop quiz: Would you get on that ship? You get double credit if you can also explain why (or why not).
What does this scenario have to do with stock investing? Plenty. The behavior of the people running the boat gives you important clues about the near-term prospects for the boat. Similarly, the actions of company insiders can provide important clues into the near-term prospects for their company.
Company insiders are key managers or ...
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