Looking for Red Flags

It was, as usual, a busy weekend around Chez Melvin. I sent my loyal spies out to investigate the economic situation. They report back that Disney World is busy, but that if language is a valid indicator there is a substantial amount of foreign visitors propping up the numbers. Other spies headed for the local malls and reported that traffic is spotty at best even on a Saturday afternoon during the Florida back-to-school tax holiday. Releasing the spies gave me time to catch the Orioles taking a series from the Rays and continue to evaluate insider trading as a predictor of stock price.

I have just started looking at the insider selling side of the equation. Insider selling is a lot trickier than insider buying as an evaluation tool. While there is only one reason to buy stock, insiders can have a myriad of reason for selling. They may have too much of their wealth in the stock and need to diversify as they near retirement. They could be making charitable donation, taking a dream vacation or going through a divorce that requires liquidity. Insider selling needs to be evaluated much more carefully....514 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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