Comments on: Don’t Trade Without Insider Information

By: Adam

Adam — Tue, 03 Apr 2007 01:04:33 +0000

You’re right on. There’s ample evidence of insider trading going on but it’s either so sophisticated or so “under the radar” that those people aren’t getting caught. But really I don’t get wrapped around the axl thinking about those kind of issues. If I do my homework and make well-informed trades (and I’m in it for the long-term gain, not a swing trade) then I’m going to be fine anyway. That’s how I see it.

By: mapgirl

mapgirl — Sat, 31 Mar 2007 23:13:17 +0000

Having been on insider trading/blackout lists for past companies, I would say NEVER DO INSIDER TRADING. Ever. It’s a bad investment strategy because essentially, on top of it being illegal, you are also timing the market, which is not really a good idea for most investors. You’ll be trading with your heart more than your head. A sure way to lose money in the long run..

Go straight for value investing. It’s the best way to make money. Buy a good stock and hold it. I’m leaning towards doing a little of that myself right now. I’m getting more familiar with the numbers I am looking for and will end up buying some stock here and there later this year.

By: Amanda

Amanda — Wed, 28 Mar 2007 19:06:38 +0000

I’ve always been hesitant in trading, i just plug money away in a sock draw :\

By: jim

jim — Wed, 28 Mar 2007 17:53:30 +0000

Like they say… if you can’t spot the sucker at the table in ten minutes, the sucker is YOU.

By: plonkee

plonkee — Wed, 28 Mar 2007 16:41:34 +0000

Maybe, its not so much insider information (in the illegal sense) as insider rumour. Like, there are rumours floating round that some people get to here, that may or may not be true, then if you are the gambling type, you might act based on those rumours – which may affect the share price and cause you to win or lose.

By: Tinyhands

Tinyhands — Wed, 28 Mar 2007 15:22:27 +0000

Whether there’s insider trading going on or not, the lesson to be learned is that unless YOU have that information, you probably shouldn’t be picking stocks. This conclusion leads many people, including myself, to become indexers.

By: KMC

KMC — Wed, 28 Mar 2007 14:43:26 +0000

I think it’s self evident that there is blatant insider trading going on. How could you even doubt it? Are you telling me the company you’re talking about got 15% more valuable in one day for a valid reason like doubling their dividend or something similar? Apparently, no such information was released that day that caused the move. So what was it? Clearly enough people knew about the future information release that they acted on it.
For example, analysts talk to management – it’s their job. I think this is a common conversation right around quarterly earnings time:
Analyst: “So I think you guys will put up 5 cents per share.”
CFO: “We feel a little more confident than that.”
Analyst: “Maybe I should look at my models again. Maybe 6 cents.”
CFO: [deafening silence]
Analyst promptly walks to the proprietary trading desk and lets slip what a good quarter XYZ is anticipated to have.

By: Blaine Moore (First Time Home Owner)

Blaine Moore (First Time Home Owner) — Wed, 28 Mar 2007 13:19:54 +0000

Living in an area with bears, I see nothing wrong with bear hunting! I probably wouldn’t use a BB Gun, though.

As for whether something is going on, I always assume that there is inside information floating around. Having worked for a few years in the financial services industry, it would not be a stretch to imagine quite a few of my coworkers trying to get an inside edge on things. It’s a stressful job with high risk, high reward, and a quick trip to the curb for those that fail.