Director's dealings

[MikeW]

Has anyone done any analysis/backtesting on Director's buying/selling affecting the share price by a reasonable amount within say a 1 to 3 month time period? Or do you consider this info at all as part of any chart analysis?

I know some Director's apparently try to manipulate this sentiment because they're aware punters do follow this but it should be relatively easy to filter out genuine buying etc. Also director buying can be for a number of reasons - exercising options & such like, not just because they think the shares are 'cheap'. Equally they could be dumping ahead of bad news, providing they don't do this during the close period (I think that's the right term?) i.e. when they're prohibited from share dealing, close to results reporting.

Rgds.
Mike

 

[JonnyT]

Hi Mike,

I did some analysis when I worked for the Motley Fool.

My backtest suggested that most directors buying is pie in the sky stuff and their companies don't then out perform short to medium term.

Sometimes you can be too close to make a reasoned judgement, which is what I think is the problem with some Directors. (And Ego)

JonnyT

 

[madasafish]

Yes agree with That. Remeber Moni's FD bought 1 Million shares when they collapsed to £1... as a result of his grossly optimistic compnay buying. Of course they fell after to about 5p....