Dear Reader,
Today I want to talk about insider buying and what that can tell us about the stock market.
Corporate insider buying has dried up bigtime.
Officers and directors of U.S. firms bought $2.3 billion worth of their companies’ stock this year, which is the lowest rate since 2014.
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The “Buffett Indicator” Predicts 62% Stock Market Crash
The last time the “Buffett Indicator” flashed this red was in 2000 – right before the market crashed 50%.
Take these 4 steps to protect your retirement here.
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Now compare that to the pandemic-induced selloff…
Remember when the pandemic happened and the market dropped down to 18,000? Gosh, that was a great time to buy stocks.
When that happened, insiders bought $1.3 billion worth of stocks in March alone!
But what we’re seeing now is corporate insiders, especially folks who’ve been around the block before…
Buffett, Bezos, Zuckerberg, of course Jamie Dimon – are sitting out, they’re not buying stocks.
That is true across the board.
Insider buying has all but dried up. Again, the lowest level in 10 years.
Jamie Dimon really hits the nail on the head on this one…
What’s great about Jamie Dimon is, unlike Warren Buffett who really doesn’t talk about the markets or general business conditions as a rule…
Dimon does talk about these things as CEO of the largest bank in the country, JPMorgan Chase.
He and I see eye to eye.
Dimon thinks the market is way underplaying the risk of recession…
The market’s too high…
And when asked if he was going to do insider purchases or whether JPMorgan was going to continue to increase its stock buyback program, he said:
No. Our stock is too high. I’m not using our capital to buy overvalued shares of our own company’s stock.
But it’s not just that insiders have stopped buying.
A lot of them have been selling…
Famously Nvidia CEO Jensen Huang along with Dell’s Michael Dell, Palantir’s founder and chairman, Peter Thiel, Mark Zuckerberg.
Basically, you get the sense that the smart money is using these crazy high prices to liquidate and build up some cash reserves.
Again, you think about Buffett, and his cash hoard is almost $300 billion.
Here’s the bottom line:
The smart money knows stock prices are very high, and they’re taking advantage of that.
They’re selling off what they can…
Even Apple in Buffett’s case – one of the greatest companies in the world.
They’re building up cash.
Because when the stuff hits the fan, as we know happens on average once every five-ish years (4.8 to be exact) …
These guys will have a big shotgun loaded up and ready to hunt for bear.
When you get to be a certain age, you don’t want to hunt mice anymore.
You want big game.
That’s the whole point.
When you have a certain amount of experience, you’re not going to be so thrilled putting $1,000 into a stock and watching it to go to $1,500 or $2,000. It’s not even worth your time.
You want to make sure that when the market cracks, or when a big opportunity presents itself …
When that pitch comes right across the strike zone …
You can swing the biggest bat you have ever held and POP! Send that thing right across the center field wall.
That opportunity right now, is in energy. Specifically, AI energy.
If you want the potential for huge gains with AI stocks… Ignore 99% of the market.
All these stocks jumping on the AI bandwagon will NOT make you rich.
However, this one stock stands head and shoulders above everything else.
It’s currently trading around $15… and may be the last retirement stock you’ll ever need.
“The Buck Stops Here,”
P.S. We are watching Hurricane Milton and taking precautions to ensure our homes, families and friends are taken care of.
We’re not sure if we’ll be able to record new Diaries the rest of the week, but we will do our best to get them to you.
