Insider Filings: The Buy Is the Tell
When executives and directors trade their own company's stock, the law makes them file it publicly within two business days. Most of those filings are noise. One narrow slice is among the strongest signals in this entire course. The skill is knowing exactly which slice.
Insiders sell for a hundred boring reasons: taxes, houses, tuition, diversifying a life savings that's 90% company stock. Much of it runs on prearranged automatic schedules. A sale tells you an executive had a life, not a forecast. Train your eye to skim past sells without a flicker of alarm.
There's exactly one reason an insider spends personal cash buying their own stock at market price: they think it's going higher. Not option grants, not compensation shares — a voluntary, open-market purchase with their own money. It's the least ambiguous act in the whole disclosure universe, which is why this lesson exists.
The CFO and CEO know the numbers best — their buys outrank a celebrity board member's. And size matters relative to the person's wealth and salary: a token purchase is public relations; a purchase that's real money to that person is a statement. One question cuts through: does this look like conviction or costume?
One insider buying is an opinion. Three, four, five insiders buying in the same window — a cluster — is a message from the people with the best seats in the house. Clusters after a big decline are especially interesting: the insiders are saying the market overshot. Our engine flags exactly this pattern the day the filings land, because the two-day filing window means this signal arrives fresh.
Same discipline as 13Fs: the buy is a prompt, not an order. Insiders are sometimes early, sometimes wrong, occasionally buying to paint confidence. Stack the clue with everything else — the score, the flow, the fundamentals — and let agreement, not any single filing, carry the weight.
Skip the sells, weight the buyers, wait for the cluster, verify the thesis. Insider buying is public two days after it happens — and it's the closest thing to hearing the people who know, thinking out loud with their own money.
Not financial advice · Educational only