Are Insider's Actually Better Than The Market?
92,769 is how many datapoints we analyzed for the graph above. Each
data point is an insider
buying a company. The green
line is what would happen if every time an insider bought you put
one dollar in a jar, at the end you'd have $92,769, the same as you
started with. The orange and blue lines show you how much you'd have
if you put that same dollar on the S&P500 or the company that the
insider bought respectively.
Is that even impressive? They look about the same? True, but there's
two things to think about. First, this is following every insider
buy, even the ones the board demanded the CEO make on companies
clearly going bankrupt in a desperate attempt to stop stock price
freefall. Second, the average investor (and average hedge fund for
that matter) significantly underperform the S&P. See JPMorgan's
annualized return by asset class below, comparing the S&P500 and
average investor outlined in red.