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CEO’s Are Buying Their Own Shares

Posted on February 11, 2008 at 7:56 pm 
Filed Under Financial Markets, Financial Planning, Investment Planning

A recent article was published by Bloomberg saying that many of Corporate America’s CEO’s, Director’s  and Senior Execs are buying more of their company’s shares then they are selling them.

That hasn’t happened since 1995 and the last time this situation happened between 1988 and 1995 the Standard & Poor’s 500 rallied an average of 21% in the following 12 months. These purchases show executives believe the worst may be over after stocks suffered the biggest January drop in 18 years on signs the economy is in a recession. In addition, the S&P 500 which is the benchmark for American equities, hasn’t fallen in the 12 months after insiders bought more than they sold, according to Washington Service data that go back 20 years.

Your Take-Away: The information above does not necessarily mean we are in the clear at all. It does however provide further insight into the fact that we may at least be better off then we’ve been hearing of late. After all, these “insiders” know more about the strenth of the large institutions they lead and thus play a tremendous role in the economy as a whole.

Although I can’t say that this news will drastically change the direction of our economy, I can say that I tend to listen to those who are most intimately involved. I made reference in a past post that if I were trying to build a house, I’d listen to the guy who has already done so rather then the guy who simply plans to in the future. I think that analogy still works in this case.

Until next time, have a Magnificent Monday!

Chris

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One Response to “CEO’s Are Buying Their Own Shares”

  1. Financial Planning on The Finance World For News and Information Around The World On Finance » Blog Archive » CEO’s Are Buying Their Own Shares on February 11th, 2008 9:59 pm

    […] CEO’s Are Buying Their Own Shares A recent article was published by Bloomberg saying that many of Corporate America’s CEO’s, Director’s  and Senior Execs are buying more of their company’s shares then they are selling them. That hasn’t happened since 1995 and the last time this situation happened between 1988 and 1995 the Standard & Poor’s 500 rallied an average of 21% in the following 12 months. These purchases show executives believe the worst may be over after stocks suffered the biggest January drop in 18 years on sign […]

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