Author/Editor
Alexander Green
Publisher
Oxford Club
Description
Edited by Alexander Green, this trading services recommends stocks that are experiencing insider buying.
Overall Rating
Rating: 3.2/5. From 22 votes.
Please wait...
3.1
Rating from 98 votes
If you’ve subscribed to Insider Alert, The, please click the stars below to indicate your rating for this newsletter, and please share any other feedback about your experience using the comment box below.
Investment Performance
Rating from 33 votes
Rating: 2.9/5. From 33 votes.
Please wait...
Your vote
- 5 Stars 4 Votes
- 4 Stars 10 Votes
- 3 Stars 8 Votes
- 2 Stars 2 Votes
- 1 Stars 9 Votes
Quality Of Writing/Analysis
Rating from 20 votes
Rating: 3.4/5. From 20 votes.
Please wait...
Your vote
- 5 Stars 6 Votes
- 4 Stars 5 Votes
- 3 Stars 3 Votes
- 2 Stars 3 Votes
- 1 Stars 3 Votes
Value For Price
Rating from 23 votes
Rating: 2.7/5. From 23 votes.
Please wait...
Your vote
- 5 Stars 4 Votes
- 4 Stars 5 Votes
- 3 Stars 2 Votes
- 2 Stars 4 Votes
- 1 Stars 8 Votes
Customer Service
Rating from 22 votes
Rating: 3.2/5. From 22 votes.
Please wait...
Your vote
- 5 Stars 6 Votes
- 4 Stars 8 Votes
- 3 Stars 0 Votes
- 2 Stars 1 Votes
- 1 Stars 7 Votes
I had this service for about 2 1/2 months from May – July 2009. It focuses on notifying you when an executive within a firm is buying a large amount of stock as an indicator that the stock will go up within a few weeks after that. They suggest certain stock prices to buy and then keep you updated when to sell. But it only comes out once a week and by the time you receive it the news is stale and you have already missed the upside move, so you aren’t in a position to buy at the bottom, cutting your profits short. And you can’t buy at the prices they suggest by then. Most of their picks do go up, but not by huge amounts: Verizon just a few dollars per share, for example. And that’s a slow moving stock anyway. When I called to cancel and receive my refund I had no problem. $800 is a bit pricey for such a limited range of profit.
Trial subscriber – couldn’t justify the price.
I regard Alex Green as among the best, analytically,
and for honesty, among the newsletter pundits, and
he appears to state his opinions well.
That said, perhaps this trader only works for the
hair trigger traders who sit and watch their
email screens and trade immediately. For me,
I couldn’t get execution anywhere near his buy
prices, nor could I make any money with his picks.
I did see some of the stock picks go up – mostly
immediately on day his email was posted. But it
happened so suddenly, it suggested someone –
many someones – got the news before it hit my
inbox. I either had to wait for the stock to
settle down – and buy hoping it would move again,
or else be the proverbial dog chasing the speeding
train – with little profit potential.
I can’t know whether his recommendations, themselves,
moved the stocks, or the “something special” Alex
opined about with the companies. I don’t know – but
I just know it didn’t work.
And, whatever the reason, in the time I watched his
recommendations and from the archives, I was astounded
by the huge results just cited in a recent, new, newsletter
sales pitch – I saw nothing near what the pitch touted,
performance wise.
The good news was – most of the stocks did go up, some.
Customer service good – prompt refund was made when I
cancelled.
Fred
Certain broker subscribers extract the information from the e-mails and buys the stock ahead of the human subscribers. That is the spike.
Todd Skousen, the insider’s son, said he knew of a “Secret Hobby” practiced by all the top corporate executives. “They trade on where they think their own company’s stock is headed.”
Stanley Kroll spent a lot of time teaching us, the various ways to enter a system for the first time. Make no mistake; the Insiders Alert is a system. It follows the actions of corporate insiders who trade for there own account to make money. Insiders may sell for a number of reasons, but they only buy when they expect the price to go up. We can follow just one executive each week, or several. If we just enter every trade when we start receiving the alerts, we may be stopped out of our trades at a loss, that show as winners to the system. But if we take each new trade as it is recommended at first, we will not have the safety of diversification that comes from being fully invested.
If you plan to wait for a chart pattern to enter, instead of going in on the recommended day, be careful to time your trade to get in before the ex dividend day. These returns are part of our profits, which we should not miss. For a short-term trade these can add a significant amount when annualized. Lets say for example we have a stock that pays 8% a year dividend. It will pay us four payments of 2% if we hold it for a year. If we hold a full quarter we would receive a 2% income payment. But suppose that we only hold it for two months and still receive the same 2% payment?
If the dividend were really paid every two months, that would be the equivalent of six payments a year, for a 12% annualized dividend yield. That is an increase of 50%! The Insider alert builds these profits into our short-term trades.
Company executives are allowed to trade as much of their own company’s stock as they want, as long as they declare their transactions publicly. Usually when we receive a transmission from the high priest of Wall Street, it comes with a buy at the market, meaning later that day. It comes with a minimum target price in the form of a suggested call option target, and it comes with a trailing stop loss price.
We set our weekly stop as an alert, do not place it in the market, or you risk the floor running your stop. You check this once a day. When prices close below your stop, just get out at the next days open.
The “Secret Hobby” of Wall Street executives is that they figure out where their own company’s stock is headed. And they trade on that information to make thousands of dollars. The hype that preceded the Insiders alerts is misleading but not inaccurate. This year so far, the Insiders are up about 50% not counting Options.
Insiders have the most knowledge of the inner workings and future prospects of their company, and they can trade in their own companies’ shares as long as they report it to the SEC. There is undoubtedly plenty of important, non-public information influencing insiders’ investment decisions regarding their own firms’ shares. Changes in ownership must be received at the SEC by the second business day following the trade, to let investors know how insiders are benefiting from the unfair advantage they have when trading there own company’s shares.
We may not know what the insiders know, but we can see what they do. This will tell us when a stock-moving event may be around the corner at a company. The trick in this game is to know which executives to follow.
Without putting up almost anything. All we need is access to the Internet, a brokerage account, and knowledge of insider’s actions, to make these transactions. All we really need to know is WHO to follow. Once we have that information, the rest is easy.
Special offers reduce the cost of The Insider Alert to about $800.00 a year from the original $5,000.00. Cheaper insider reporting services are springing up all of the time. The sixty-day money back guarantee is not long enough to get your full position on, or see significant profits in equities. But it is long enough to show you how simple it is to use this technique, while working less than one hour per week.”
I have my position on now. Lets see what we have learned from the corporate insiders who trade, to make money in there own companies shares?
Of the eight recommendations I have received so far. One has been stopped out at a loss. One is down about -10%, another -2% from where I got in. One is about even.
The remaining four stocks have gains of +4%, +7%, and +11%. These trades were put on the day recommended, or at a limit price suggested by our alerts.
One thing I like about this alert system is they explain what to expect before it happens, and why the trailing close only stops, are so close to the action. So far, so good.
Options on these have already been closed out at profits, but that is a different game entirely when you see commissions cost more than the options.
The sixty-day money back guarantee is long enough to get your full position on, and see profits and learn what to expect. It is long enough to show you how simple it is to use this technique.
It turns out the Oxford club uses close-only stops on their portfolios but the alert services, because they are so short-term use regular stops. Which pretty much means they can be automated. Which is a real time saver.
Because I reinvest dividends always. I see a bunch of fractional shares showing up in my account when the stops are hit.
The methodology with Insiders Alerts is to set stops automatically, and adjust them as necessary, with each weekly briefing. Short-term stocks must be riskier than commodities. Trading hedged seasonal spreads; we did not place our stops in the market. We waited until after the close and got out on the opening.
Using automated stops certainly is a time saver. This means we do not have to check the market each day for the Insiders Alerts stops. It is easy to keep track of the positions using Wikinvest to get a snapshot of all my securities accounts and certificates during the day.
One hour a week could do it. Using trailing stops and having them take us out, has been an accepted strategy for decades. This week is the end of the free trial; the system shows promise I will be staying with it.
They use close only stops on the trading advisory services now.
The idea that executives on Wall street have nothing better to do with there lives than to buy shares in there own companies at the proper times appears to be working out very well.
They see an event coming, maybe a few times in their working career, they get a pile of liquid capital together and they just buy stock in there own firm.
Luckily for us, they report their actions to the SEC where our scouts pick up the trail. Of course you have to know which people to watch. And the times and situations have to be right for the company they work for. But in general when the company’s stock is about to go flat out. Somebody in there makes a move.
I have a portfolio of six of the Insiders stocks. All of them have profits. Everything over a week old is up 5% or more, two are close to 10% one is up almost 20%. Three have been stopped out with losses, and two with profits.
The main thing that contributes to success with this strategy is getting in on time. That is if you get in when the alert is given and not at some higher price later, than your results will more closely follow the system. The thing that determines how much money you make is what Tharp teaches as position sizing. If you put big bets on losers and small bets on winners you are less likely to reach your objectives.
So what the Insider gives us is what to get in, when to get in, as well as where to run our stops. The companies are diversified by sectors. And our purchases are spread out over time. When you are purchasing an oscillating price structure even when it is in an uptrend. You may, I find usually, experience a minor drawdown after making a purchase. By putting stocks on incrementally like the Insider Alert’s does. You can be over the drawdown of one security, before you add the next. When one stock is performing poorly, the other will be over its dip and be performing well. As I say all six of my Insiders positions now have gains, but one no-where bank stock took a few weeks to get with the up trend.
Lets take a look at how we are managing risk. First off we are always entering a stop when we place our trade, and monitoring it weekly. So our risk is pretty much contained. We know when we go to sleep about the worst that can happen to us, if we care to look. So you will not run into unknown, unlimited dangers. We will know about it when the trend changes.
Let me make it clear, This kind of speculation should only be done with a segment of your assets. Ideally your total investment money should be spread across different asset classes, countries, industries, as well as individual companies to reduce risk. You must also be sure that they are, as far as possible, uncorrelated.
But with that understanding, risks are addressed in the amount of each stock that you buy, relative to the other Insiders’ stocks you are holding.
The question is whether that “risk” is appropriate for maximizing win rate and/or gains or it’s just an after-thought.
One thing has the ring of truth. “They trade on where they think their own company’s stock is headed.”
Currently the portfolio has seven positions. When we get stopped out of one we enter another. You cannot pyramid stocks, because the capital is not free to use for pyramiding until it has been liquidated. You must use capital to enter each trade.
Additional increases in holding while profitable cannot be called recommended trades, which are usually given at a specific price. The Insider alerts generally trades in the largest companies many are components of the S&P 500. The size of these makes them less susceptible to manipulation, like penny stocks or companies with small float would be.
The main problem that I see with any system is how to get the initial seven stocks on without increasing risk. If we take each new trade as it is recommended, we do not have the safety of diversification that comes later. Fresh capital can increase the size of each position as you go on in time. After that it is mainly get stopped out, replace, and balance the size of your positions relative to each other.
Insiders trade in their own company’s stock as much as they want. You could look at this alert, as really two market letters. Although it is mainly wrapped around equities, we see significant gains in the call options suggested as a bonus to each stock trade. Alex gives the specific option, the entry price, and liquidation points as expiration approaches.
As I said above “they figure out where their own company’s stock is headed and they buy shares to make thousands of dollars.” Insiders have the most knowledge of the inner workings and future prospects of their company. They have to report and hold for six months, we do not. We may not know what the insiders know, but we can see what they do. They tip us off to unexpected price gaps in price action. This type of technical analysis following one person does not show up easily on price charts, which are a tool for watching the movements of the masses. All that you need is the Internet, a funded brokers account, and knowledge of insider’s actions, to make money in the stock market today.
Of the seven insiders securities in my portfolio now. One is up 43%, the next three have gains of +19%, +12%, +7%. The only one down has an earnings report due soon. The rest look good but are new trades at about even.
Review by -o0(GoldTrader)0o-, December 12, 2010
The idea that executives on Wall street have nothing better to do with there lives than to buy shares in there own companies at the proper times appears to be working out very well.
They see an event coming, maybe a few times in their working career, they get a pile of liquid capital together and they just buy stock in there own firm.
Luckily for us, they report their actions to the SEC where our scouts pick up the trail. Of course you have to know which people to watch. And the times and situations have to be right for the company they work for. But in general when the company’s stock is about to go flat out. Somebody in there makes a move.
I have a portfolio of six of the Insiders stocks. All of them have profits. Everything over a week old is up 5% or more, two are close to 10% one is up almost 20%. Three have been stopped out with losses, and two with profits.
The main thing that contributes to success with this strategy is getting in on time. That is if you get in when the alert is given and not at some higher price later, than your results will more closely follow the system. The thing that determines how much money you make is what Tharp teaches as position sizing. If you put big bets on losers and small bets on winners you are less likely to reach your objectives.
So what the Insider gives us is what to get in, when to get in, as well as where to run our stops. The companies are diversified by sectors. And our purchases are spread out over time. When you are purchasing an oscillating price structure even when it is in an uptrend. You may, I find usually, experience a minor drawdown after making a purchase. By putting stocks on incrementally like the Insider Alert’s does. You can be over the drawdown of one security, before you add the next. When one stock is performing poorly, the other will be over its dip and be performing well. As I say all six of my Insiders positions now have gains, but one no-where bank stock took a few weeks to get with the up trend.
Lets take a look at how we are managing risk. First off we are always entering a stop when we place our trade, and monitoring it weekly. So our risk is pretty much contained. We know when we go to sleep about the worst that can happen to us, if we care to look. So you will not run into unknown, unlimited dangers. We will know about it when the trend changes.
Let me make it clear, This kind of speculation should only be done with a segment of your assets. Ideally your total investment money should be spread across different asset classes, countries, industries, as well as individual companies to reduce risk. You must also be sure that they are, as far as possible, uncorrelated.
But with that understanding, risks are addressed in the amount of each stock that you buy, relative to the other Insiders’ stocks you are holding.
I have been unable to remove the unedited copy of my previously posted December 12, 2010 review, which follows my February 15, 2011 review above. Sorry about that.
Insiders have been leading us to stocks that perform well in the space of a short-term call option. It is one thing to know that a stock is going up, take a position, and wait for events to unfold. But the insiders stocks come with call options suggestions attached. Which means not only do we expect the stock to move, but when insiders buy stocks in there own companies, with there own money, for there own accounts, we expect to see them make a move soon. If they do not, we get out and into something else that will.
Recently we had one ceo buy about a million dollars worth of his own stock for his own account. Four weeks later the stock was 18 points higher. We are still in.
The alerts on two of these insiders stocks in our portfolio, took triple-digit gains on half, sold more on half of what was left, and is up 200% on the balance. Let profits run, is the strategy. We are still in.
We have another guy who keeps increasing his ownership in a hippy dippy stock. We followed him for a gain of 30% on our original holding. With the May call having already quadrupled and still running. We are still in.
Another insider stock is up almost 10 points since we got in four months ago. We are still in.
Currently the portfolio has six positions out of our usual seven. Insiders tip us off to unexpected gaps, which is what you need to win on option trades.
Because I have added to these positions after the initial buy, Wikinvest includes all the shares in with the % gains. One is up at least 22%, the next two have gains of at least +18% and at least +17%. The rest are newer trades at about break-even.
For six months they left me alone but now I am being bombarded with offers to reenlist for another year, to take trips to the big apple, and to buy other poorer performing Oxford club goodies. The Oxford club talking emails are the time-wastingest things I have encountered in the 21st century. I am afraid to open them. The business of the Oxford club is to “sell you a subscription, so they can sell you MORE SUBSCRIPTIONS.”
Despite claims to the contrary I find the web site posts the new letter before the email alerts arrive. It could be that it takes twenty minutes for email to arrive in Googleland, but I can get to the Oxford club site instantly.
By there own admission the insider’s alert is Alex’s top-performing newsletter. Claims that you can take all of the winnings from one newsletter and get a hit with the very best trade of another newsletter undermines the Oxford clubs creditability.
I currently do not subscribe to the ‘Insider Alert’ but will most likely do so. I am currently a member of the Oxford Club, have been for about 4 years. On most positions, they use a 25% trailing stop. I use 15%. I have subscribed to more then a few advisories in the past but for me, the Oxford Club has been the best. I do get tired of every month being flooded with ads for their other services but that is a small price to pay. Thanks for posting a review on this service, it re-enforces my decision.
I think we give back too much at the top. With that being said, far away trailing stops have kept us in some great stocks. There are double-digit gains on half of the insider positions. Two stocks have gains near 20%, and one is over 35%.
These would have shown up higher, but the gains are diluted because of the addition of new capital. The gains reported here do not represent the original positions, but my actual results, which are less.
Insiders appear more reliable than analysts as guides to stock performance. Once fully diversified, and taking new trades on the day that they are alerted. I have found myself perpetually sitting with thousands of dollars of open trade profits I would not have had, if not following the system.
Funny thing though. We recently got an alert, on some stock that had previously been in an investor’s income letter. We got it explained to us, almost word for word, as it was given to them months before. The income investors got in because of the yield, we got in because of the expected upcoming Gap.
—o0o—
I found it helpful to chart insider trades starting with the day we buy, and leave the rest out. It helps when looking at insider trades started weeks apart. Instead a wondering when did I get in these, it is clear with a glance on the chart.
Odds heavily favor corporate insiders as guides to stocks that will do well. If you knew the information that the they are using, if you did have it for true, it would already be discounted in the price.
All that we know for sure, is that some insider is tipping his hand on what they think is going to happen, by going on an all out buying spree, with his own money in his own account, at this time.
We also know that the six of the stocks in our insider’s portfolio have gains from following insider’s actions, without knowing why they made them in the first place.
—o0o—
The money question is, “why is this guy spending millions of dollars of his own money, to buy these shares for his own account, at this time?”
The answer is to buy, put on a stop, and hold until stopped out, sixty, or ninety days later. When insiders and analysts directly disagree, the insiders are usually right. I don’t see anything in the charts that would prepare chartists for what insiders are planning.
–o0o–
The government warns that “an investor’s informational disadvantage vis-à-vis a misappropriator with material, nonpublic information stems from contrivance, not luck; it is a disadvantage that cannot be overcome with research or skill,” or by reading a chart. Nothing I have seen so far, would have tipped chartists off that insider stocks are going to breakout to new highs at these times.
Insiders can take a major stake in a company without being subjected to future liability for buying shares ahead of a big positive announcement, when they are prearranged purchases under an automatic investment plan that buys stock at regular intervals without regard to price.
Experience is showing, that we can safely ignore the Wall Street consensus, discount technical analysis, and rely on the insiders’ behavior alone when entering a new position. Right now, Alex’s alerts are on a run. The only way to lose on insider’s trades like these, is to buy in late, sell out early, or not buy enough!
I think we give back too much at the top. With that being said, far away trailing stops have kept us in some great stocks. There are double-digit gains on half of the insider positions. Two stocks have gains near 20%, and one 37%.
These would have shown up higher, but the gains are diluted because of the addition of new capital. The gains reported here do not represent the original positions, but my actual results, which are less. Beginning capital, to current market price has increased 47.96% YTD at the end of the first quarter of 2011.
Insiders appear more reliable than analysts as guides to stock performance. Once fully diversified, and taking new trades on the day that they are alerted. I have found myself perpetually sitting with thousands of dollars of open trade profits I would not have had, if not following the system.
Funny thing though. We recently got an alert, on some stock that had previously been in an investor’s income letter. We got it explained to us, almost word for word, as it was given to them months before. The income investors got in because of the yield, we got in because of the expected upcoming Gap.
—o0o—
I found it helpful to chart insider trades starting with the day we buy, and leave the previous history out. It helps when looking at insider trades started weeks apart. Instead a wondering when we got in, it is clear with a glance at the chart.
Odds heavily favor corporate insiders as guides to stocks that will do well. If you knew the information that they are using, if you did have it for true, it would already be discounted in the price.
All that we know for sure, is that some insider is tipping his hand on what they think is going to happen, by going on an all out buying spree, with his own money in his own account, at this time.
We also know that the six of the stocks in our insider’s portfolio have gains from following insider’s actions, without knowing why they made them in the first place.
—o0o—
The money question is, “why is this guy spending millions of dollars of his own money, to buy these shares for his own account, at this time?”
The answer is to buy, put on a stop, and hold until stopped out, sixty, or ninety days later. When insiders and analysts directly disagree, the insiders are usually right. I don’t see anything in the charts that would prepare chartists for what insiders are planning.
–o0o–
The government warns that “an investor’s informational disadvantage vis-à-vis a misappropriator with material, nonpublic information stems from contrivance, not luck; it is a disadvantage that cannot be overcome with research or skill,” or by reading a chart. Nothing I have seen so far, would have tipped chartists off, that insider stocks are going to breakout to new highs at these times.
Insiders can take a major stake in a company without being subjected to future liability for buying shares ahead of a big positive announcement, when they are prearranged purchases under an automatic investment plan that buys stock at regular intervals without regard to price.
Experience is showing, that we can safely ignore the Wall Street consensus, discount technical analysis, and rely on the insiders’ behavior alone when entering a new position. Right now, Alex’s alerts are on a run. The only way to lose on insider’s trades like these, is to buy in late, sell out early, or not buy enough!
Strange things here. My review of April 29th did not show. When the revised post of May 3rd was posted the April post was not there. Now it is. One of these posts should be removed.
This letter is based on The Peter Lynch philosophy of insider trading: > Insiders might sell their shares for many reasons, but they buy for only one: they think the price will rise.”
Insiders sell their own companies’ stock for thousands of reasons. They might need a big hunk of cash for something personal like a new house or yacht, or they could paying off a mistress, or just plain giving it away. Sometimes insiders sell as part of a planned selling program, which allows them to sell stock in stages instead of selling all at one price. They could be lightening up because they think, the stock may be overvalued. Some even dump their own stock because they have inside knowledge that a competitor is gaining market share.
The seller has thousands of good reasons, the buyer only one. Insiders buy shares in there own companies when” they think,” the stock is going higher.
How insiders think is really not our concern but their track record after they have purchased before, is. Insiders trading as a group deserves an even closer look. It is the act of buying that tips us off that our person on the inside sees or feels something positive. Just because they think it will go up doesn’t mean it will. If the market doesn’t agree with them, it could end up going nowhere.
It is big money that drives stock prices, not insiders. Technical Analyses can help you see this activity on the chart. It is the big money coming in after the insider that makes the price gap up in value. By following selected insider-buying activity; we can get in before the instructional investors are through.
Peter Lynch: > the insider has only one reason to buy: to make money.
Recently we received a third signal from the inside. We were cautioned because there was, “no recent insider buying.” Jessie Livermore taught us, “The absence of insider support is generally accepted as a pretty good bear tip. If insiders don’t buy their own stock on reactions, who should?”
The markets have gotten so big that we can hardly look to insider buying to provide support. If the insiders think this company has a play, they will resume buying, we will be alerted, and can get back in if we are stopped out.
The race is not to the swift, or the battle to the strong, nor does food come to the wise, or wealth to men of understanding, or favor to men of skill … but that’s the way to bet.
The emerging strategy is to accumulate stocks that show recent insider activity that are likely to go up in subsequent weeks. Many stocks rotate through this select group, some repeat, many are new. When we get stopped out we are out, until some insider makes his move, then we might get in.
How do you tell the difference between a piece of rope laying on the ground and a snake? No movement, no snake.
Similarly how can you tell a dead stock from one that is about to make an unexpected move? No insider activity, no position. Results have shown that insider stocks traded according to this proven strategy as a portfolio, will out perform.
The Insider Alert has a policy of staying full invested. Currently the trailing stops have us unvested in just about everything. I am sitting with cash.
So, do Trailing Stops Really Work?
One of the most controversial aspects of The Insider Alert’s investment policy is trailing stops. Flying by the seat of your pants, rarely leads to superior investment performance.
Trailing stops in this case seem to be protecting our profits, and in all cases our trading capital.
Finance professors – researched the performance of money managers who oversee pension funds, endowments and high-net-worth accounts. Institutional managers who fared best were those with restrictive rules that didn’t allow much leeway for holding stocks for emotional reasons. Managers who relied on “flexible” sell strategies did far worse.
The culprit is almost always pride, ego, or emotion. Without any kind of sell strategy, emotions come into play. And emotions are almost always wrong. Alex says, by adhering to a disciplined trailing stop strategy, The Insider Alert’s investment system mows down emotion-driven trading errors like a field full of dandelions. It cures greed. Eliminates fear. And does away with wishful thinking – as in, “I hope this stock turns around and starts going the right way.”
Trailing stops serve two purposes…
• They make sure we never let a small loss become an unacceptable loss.
• They keep us from selling stocks while they’re still trending up.
When we run relatively close stops as these 20%. A stop out only takes a 25% rise to get even. A figure many of our stocks have attained. But if your drawdown were to go to 50%. It would take 100% to break even, which is entirely a different thing. We see 100% in The Insider Alert’s option trades all the time, but not stocks.
The one knock against using trailing stops is that unscrupulous market makers will sometimes take out your stop order right before a stock takes off. This has not been the case with The Insider Alert’s stops. We get the trade after they run the stops. The work around for this of course, is to have an alert sent to you that does not enter sell orders in the actual market. You can enter the stocks you own, the price you paid and the percentage-trailing stop you want to use. If any of your stocks close beneath your selected stop, you can be notified and you can place the order to get out on the next opening.
The Insider Alert starts out at 20% and gets moved up to 15% or sometimes 10%. Alex says the key is to make sure you have an acknowledged point where you’d be willing to sell any individual stock. Trailing stops don’t just offer to cut your losses and protect your profits. They guarantee it.
Not only were we stopped out of everything; we had stops take us out of some the same day that we got in. But like all markets each trough leads to another crest. That is why we use stops. This just shows the importance of putting stops on as soon as we get the fills. The insiders know what to buy but they are by no means masters of technical analysis. That is not why we follow them. It is for some short term, unknown, unexpected event that may not have happened yet. Being on the trail of insiders negates the effect of market timing. When the market makes its move we will be there. A reduced position perhaps but we will still be around at the finish.
So, this past month we are building our portfolios back up. Coming into September we have three new positions on with unrealized gains of 5%, 4%, and 3%. We will be running the risk of inadequate diversification for a few more weeks as we incrementally build up the number, as well as the size of our positions.
As a new subscriber I was faced with the decision weather to go into everything on one day, on one open, or take each new trade as it was discovered. This year we do not have the luxury of that choice. Each trade as alerted is the only choice in the system. At least from experience we should have a good idea of the maximum position size for each stock.
In essence, after being stopped out, subscribers are building diversification into new portfolios with profits in all stocks.
Lets see what we have learned following the corporate insiders who trade, to make money in there own companies shares, with their own money?
All of our positions are in the money. The Insider Alert continues to buy leading financially sound companies, growing and marked by significant insider buying. We don’t need to predict how or when this situation in Europe will all play out. The companies we own are set to report sharply higher earnings in the weeks ahead, and the executives who run them have been eagerly buying there own shares. That’s what is important. No one knows better about there own company than the insiders, who live and breathe inside those companies.
These individuals have access to all sorts of material, non-public information about the company’s. Insider buying shows that they believe they are is undervalued, and set to rise soon. All we have to do is to look at what top executives are buying with their own money at current market prices. This is especially true when the buying is enormous.
So let’s take a reality check on our portfolio. Every company in the portfolio is profitable. All of them pay dividends. And each has significant recent insider buying. Of the five insiders stocks in our portfolio now. One is up 20%, one is up 12% another 8%. All of them have profits. At a time when T-bills sell for less than a third of one percent.
We have seen that Insiders do know when to buy there own stock, with there own money.
November was marked by an exposé on “Congress – Trading stock on inside information,” shown on the “60 minutes TV news and advertisements show,” see: http://www.cbsnews.com/video/watch/?id=7388130n
This led to a congressional hearing on “Congressional insider trading information,” see: http://www.c-spanvideo.org/program/InsiderTra.
The loophole in which members of congress and legislative staffers are immune from enforcement of insider-trading laws, is because the delayed reporting of securities transactions by congress, defeats, obstructs, and impairs its use as timely evidence. Insider-trading cases are hard to prove, because the trades must be tightly linked to the events or information on which they are allegedly based. Trades need to be disclosed in “real time or near real time,” so that the memories of potential witnesses are fresh and suspects do not have time to cover up their actions. The SEC, which conducts most insider-trading investigations, urged faster disclosure of stock trades by members of Congress on electronic, searchable forms. This is why no Congress people were investigated under the current laws.
The media and congress consider the same group of insiders that we monitor, the benchmark of excellent trading in the stock market. If they succeed in getting congress insiders to report promptly, just as corporate insiders do now, this will just be one more tool we can use to continue to out perform the insiders ourselves.
Coming into this week my leading insider stock is up almost 17%, another 11%, almost 6% on the third, 2% and our last purchase is down 5% with a bullet. Two options, which I did not take, were half cashed out up over 100%. My experience is that a few options come in, but they do not make enough to cover the expense of buying them all as recommended.
The Insider Alert as it is today is all text. That is to say it totally ignores the right (creative) side of the brain. Many brokerage accounts have evolved to feature charts and diagrams showing the effect on stock prices after Insiders buy. But Alex’s Insider Alert remains mute to the visual recognition side of the human brain. No video’s, charts, graphs, or links. The only enhancement I have seen is a lame attempt at a print view button. Nothing that appeals to the right hemisphere of the brain. It has all of the sophistication necessary for an Apple II, before the Internet. Alex’s current insider alert could have been sent out by fax (which came later). In no way shape or form, is the Insider Alert state of the art in appearance, or even from this Century. You would expect more from a premium product.
They always talk in terms of current open profits, which can be substantial but misleading. I must admit I often find it hard to get in on the same day as the Alert, or at there prices on the winners. There are many reasons for this. It may not come with enough time left to place an order. Price may take off before the email arrives or it is posted to the web site. I do not know what day or time each weeks alert will arrive so I may not be sitting at my machine, with liquid funds and my finger on the trigger ready to buy when the trades taking off the fastest arrive. I could be out driving my sports car, I could still be asleep.
Currently in my own account, one stock (on hold) is up over 41% where it has been before, with another up over 16%, the third winner up over 10%. I have gotten use to seeing double digits in the longer held insider securities, and losses on the new ones. We have five stocks. You don’t see losses on the longer holdings because they get stopped out. We give a lot back with our stops, but that is how trailing stops lets profits run. Last summer we were stopped out of everything at once. Although sequential new trades showed profits almost immediately, it took months to over come the losses from the drawdown, which is never mentioned.
Probably because of the popularity created by Peter Lynch, you can now easily find out what insiders are buying, and a Google search on the company and form 4, will show you the companies filing. Of course you need to know which companies to watch and which insiders in those companies. To help you some sites list the effects on price after specific insiders buy. They will give you the Predictive Insiders and the results they have achieved before. Many have easy to see charts with variables chosen by the chartist. The main thing you want to see is buying without exercised options. You want to know when they go out with there own cash and buy stocks because they think they are going to go up soon. No one knows better than the insiders, unless it’s the government about to do some big deal.
The Insider Alert has some old advertising running around about speculating with $1,000.00 in each recommendation and ending up with a ton of money. But that is with $1,000.00 in each stock, as well as $1,000.00 in each option, for many specifically chosen years. Whenever you hear these outrageous claims do the math. If there was one new recommendation every two weeks, in three years alone you might need over a hundred and fifty thousand dollars to try this $1,000.00 bet. You might need twice that in six years.
Many times because I get in at a higher price than on the day of the alert. The published trade will show a gain when stopped out where I will actually show a loss. Running a twenty percent stop you can report a trade up 10% unrealized for weeks and realize a 10% loss on the stop out. You can also lose 20% at the beginning. It takes to 10% winners to cover that one loss. The stop has to stay back if we are going to be in for the big moves. The Insiders feel and act on the turns in there business, who knows how long before the market reacts?
http://youtu.be/f74MweTRICM?t=27s
I was told that when Insiders buy they cannot sell for a year. I do not know if they cannot sell the shares that they just bought (last in, first out), or if they cannot sell any of there previous holdings (first in, first out). But many of the Insider Alerts stocks may get recommended again after being stopped out, depending on further insider buying, and what it is up against that week. So you might want to watch these after getting out. There is only one reason insiders buy, but that does not say much about insiders timing. It does not say why they bought, when they bought. The visual charts not used by the insider alert, show what has happened before when insiders buy stock.
Insiders unrealized gains do not well reflect realized returns. But they are consistent and you could get double-digit gains in almost all winners if you do not wait to be stopped out, but get out earlier. But of course if you jump out every time a stock trades up ten percent you will be sitting around in cash most of the time, and miss out on the many that go twenty, thirty, or as the case with our current summer holding 40%. And if you sell out at 10% to buy the next new pick, there is no telling it will out perform what you just sold. That is it may take longer to get to 10% than the proven winner that you just sold gets to 20% or beyond.
The Oxford Insider Alert support email contact is pretty much non-responsive. Tech phone support doe not use the product. In all the time that we have been following this, despite what phone support says. We have not had any sell orders. Alex has not told us to sell anything that we owned. The Insider Alert uses trailing stops, and this is the only way that we close out positions. When an Insider Alert says to sell something we are already stopped out of it.
In the beginning I speculated that when building a new portfolio would it be better to put an equal amount of funds into each recommendation right off, or just take each now trade one at a time. Last summer when the US dollar’s creditworthiness was downgraded. We were stopped out of everything simultaneously. The course that naturally evolved getting back in, and has worked well, was to take each trade as it came up one at a time. Investing about 15% of the portfolio in each stock until we had our full position on.
That is to say the size of each position in the portfolio starts out about 1/6 of the whole pie and is left to grow on its own from there.
You can be pretty sure that on your winners you will have the opportunity to make the choice to take a quick 10% gain or to let it ride for more on a trailing stop or get stopped out.
Warren Buffet on diversification
http://youtu.be/IL7zBeVAKhc
Warren Buffet ~ Once you are in the position of evaluating businesses, (which is essentially what Alex helps us to do), anyone working with normal capital, who is willing to bring the effort, intensity, and the time necessary to get that job done, six stocks is plenty. Going into more without putting more funds into your best stock has got to be a mistake.
Trading a tight portfolio of income producing insider stocks will cut transactions costs and save time over being spread thin with many stocks and investing theories. The idea is that you have to have a bet on big enough in each company to make a difference or you might as well own an index.
Insider Orphans
When an insider buys they have to report within two days and cannot sell for a year. Insiders often buy before the point of maximum pessimism so prices can go lower after insiders buy. The method that we use can withstand a drawdown of only 20%. When securities go ex dividend prices almost always dip. If this occurs when we are close to our stop we may get kicked out right at the time that we should have been getting in. When we are stopped out after an ex –dividend date, and before the dividend has been paid. When the dividend arrives the corpus is gone. It comes in as an orphan. Three months later this dividend pays dividends, and three months after that they both pay more dividends. Some insider orphans dividends are up 30% and 15%.
Just about all of the insider stocks show profits, most of the time, because when they don’t the stops take us out.