Why is this happening?
Insider selling has officially hit record levels, and the corporate dumping of stock isn't just in S&P 500 companies. Last week's insider selling hit an all-time weekly record of $4.5 billion, according to insider tracking company InsiderScore.com. Prior to that, no previous week had seen more than $2 billion in net selling. In S&P 500 companies alone last week, insiders sold an unbelievable $2.8 billion worth of stock. That selling was more than four times the amount seen in the prior week for S&P 500 companies.
Theories for the sell-off: (1) Corporate insiders anticipate higher taxes on their income, capital gains and dividends when Congress takes up the expiring Bush tax cuts; (2) Insiders think the stock market is temporarily overvalued after a hot autumn; (3) Insiders think the economy actually stinks, so they're cashing out now to pay for gold-plated insulation.
An interesting anecdote: Daily Beast owner Barry Diller just bought $7.4 million of Coca Cola shares.
Read the full story at The Street.