Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Are Corporate Insiders Ditching Their Firms for Precious Metals?

Commodities / Gold and Silver 2010 Sep 23, 2010 - 10:58 AM GMT

By: Dr_Jeff_Lewis

Commodities

Corporate insiders are flocking out of their own companies, selling $290 in stock for every $1 they buy in S&P 500 firms.  With outflows of more than $439 million dollars in equities by corporate insiders and inflows in the billions flowing into precious metals ETFs and securities, would it not be safe to assume that the same insiders dumping their shares are on the buying end of the metals spectrum?


Insider Activity

Bloomberg reports weekly data on the number and value insiders in S&P500 companies buy and sell on a week to week basis.  In the week ending September 17, insiders made purchases of just $1.4 million and sales of $441 million for net outflows of $439 million.  Breaking down the numbers, investors should see that for every $1 of stock purchased, $290 was sold – a very clear trend.  Last week, that ratio was even higher at 649:1. 

It should be obvious that insiders are starting to get at least a little concerned about their financial position and the relationship their finances have with their employer.  Inflows in commodity exchange-traded funds suggest that while insiders are buying, at least someone is buying precious metals, maybe the very people who are selling out of their employer’s stock.

Last Friday, the popular GLD ETF added 6 tonnes of gold for net inflows of 2 tonnes for the entire month of September.  That amounts to $270 million in inflows on Friday and net inflows of $90 million for September. 

Mix and Match

Pundits are saying bullion's run is due to fear, and fear only.  While we can agree, at least in the perspective that gold and silver are generally purchased during times of economic uncertainty, gold is not a natural response to fear.  People don't go buy jewelry after visiting a haunted house, nor do they go grab their gold when a stranger comes knocking on the door at midnight.

No, investors are buying gold and silver because it works.  Unlike currency, stocks, or even their own employment, gold and silver are forever.  They've been valuable forever, and they'll be valuable for forever more.  Only in that perspective can we agree that in fact, gold and silver are a response to fear.

But don't buy into the idea that it is only fear that keeps gold and silver rising higher.  Certainly, at least to some degree, we are paying higher silver and gold prices today than a few years ago due to increased concern about the state of the economy.  However, we must also point out what it is that has investors so fearful: the decaying dollar, growing disparities between the ultra-rich and ultra-poor, exploding global debts and declining economies in virtually every post-modern civilization.

Gold and silver have outlasted each of the above events – whether it was the hyperinflation of the first US Continental dollar, the class war that was the French Revolution, the decades-long stockpiles of decades worth of war debt, or the fact that emerging economies today and in the past are the only ones that have shown growth.  If gold and silver buying must be due to fear, then it is due only to rational fear.

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com

    Copyright © 2010 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in