We have examined many diverse trading strategies over the past 7 years.
None of them were as profitable as tracking insider trades.
The basic principle of this strategy is – I will risk my money on the company when the company's managers risk theirs.
There can be many reasons why insiders sell a stock,
but there is only one reason why they would buy the stock.
For the same reason you and I buy a stock,
we believe in the company, see potential, expect to make money – and buy.
Insiders put their personal money into the stock?
This is a positive signal that shows confidence from the company's most senior executives.