Alexander Green’s Definitive Guide to Profiting From Insiders

Most investors realize they need a successful, battle-tested system to increase their returns in the stock market.

But which system? There’s so many.

Every guru claims their system is the best. They can’t all be, of course.

The least you should expect when evaluating a stock-picking system is that it passes the common-sense test.

That means it should be easily understandable and intuitively believable.

That’s why I’m surprised more investors don’t use one of the most intuitive and successful stock market indicators of all: heavy insider buying.

Hi, I’m Alexander Green, Chief Investment Strategist here at The Oxford Club…

Before heading up The Oxford Communiqué, I spent 16 years on Wall Street as a research analyst, an investment advisor and a registered portfolio manager.

Since then, I’ve spent decades mastering the art and science of investing.

In my long career, I’ve supervised hundreds of VIP accounts worth tens of millions of dollars. And learned which systems work and which don’t in the process.

I’ve seen them all the good, the bad and the ugly…

There is one investing strategy I fully endorse… Because twenty-five years of experience has shown me what works well in both good markets and bad: riding the coattails of knowledgeable insiders.

It’s 100% legal. Don’t get this mixed up with insider trading, which has sent many a shady executive to prison.

That’s when a company insider trades stock based on information that’s not available to the public. So my strategy couldn’t be further from that…

I pay attention to what the people who know a company the best are doing with their money… then follow suit.

A joint study by Harvard and Yale professors found that following insider purchases has beaten the market by  double digits. Their study showed that insider purchases beat market returns by 11.2% per year.

It’s become a timeless strategy for developing an edge over other investors… Including some of the greatest investors of today and of the past.

Legendary fund manager Peter Lynch believes there is no better tipoff to the probable success of a stock.

George Soros, the most successful hedge fund manager ever, has used the strategy to earn returns of 36% annually… (At that rate, money doubles every two years.)

Research from the EDHEC-Risk Institute shows that sound companies with widespread insider buying tend to outperform the market by nearly 3% up to 120 days after an insider purchase is announced.

I have used this technique with great success in my  Insider Alert. That’s why I’m one of the biggest advocates of following the insiders and believe it’s one of the most powerful investment strategies in the world today.

Here’s why this strategy works, while most strategies you’ll find online or in the news fall apart…

It’s common sense that corporate insiders know more about their company’s prospects than we do.

How could they not? They have access to all sorts of nonpublic information that’s unavailable to the rest of us…

Insiders know an awful lot about their own company’s health and the likelihood of it getting healthier.

That’s why when insiders buy a significant number of shares with their own money at current market prices, information they are legally required to report by the way, it should get your attention.

And if you want to use a method that’s proven to beat the market, there’s nothing like riding the coattails of knowledgeable insiders.

It is, simply put, the most powerful and effective stock market signal in the world.

I call it my “no spin” investing secret because it’s like having your own personal “truth detector” for stock prices.

You’ll know exactly which stocks are destined to fail and, more importantly, which ones are likely to succeed in a big way.

Many years ago, insiders could buy or sell at any time for any reason and just pocket the gains.

Needless to say, this infuriated most investors who rightly saw the game as rigged in favor of those holding nonpublic information.

Corporate insiders have a treasure trove of information available to them, and they can hardly forget this knowledge when they go into the market to trade.

They know, for instance, the direction of sales since the last quarterly report, what new products and services are in development, whether pending litigation is about to be settled, and plenty of other stuff those of us on the outside looking in couldn’t possibly know.

The insiders have an enormous, unfair advantage in trading their own company’s shares.

And so the federal government began requiring corporate insiders to file a Form 4 with the SEC any time they transacted in their own company’s shares, detailing how much they bought or sold, at what price and when.

I’ve been tracking insider buying for more than two decades now…

I have access to a database that lists Form 4s as soon as they become public information. It’s the same system used by the SEC to track insider moves.

And I have access to this site every day. It allows me to track every single insider purchase made.

There is still due diligence required, of course.

For example, you need to know how many insiders are buying, how much they’re buying and what their track records are.

There are a few red flags too…

For example, if a company insider had a history of buying their company’s stock high and selling low, that’s a red flag, so be careful… They might be good at whatever job their company pays them to do, but that doesn’t mean they’re also a good investor.

Insider buying isn’t the only metric you want to use either.

A company with poor fundamentals, declining revenues, no profits, high debt and no cash to pay that debt off, isn’t one you’d want to invest in, no matter how much stock its insiders are buying or selling.

So I have a scoring system I use that helps me dig deeper and narrow my search for the best possible set of circumstances. It takes 25 different metrics into account, including insider buying and individual insider’s track records, as well as company financials and fundamentals…

Now, I’m not going into all the criteria and analytics that often lead to highly profitable trades. What I most want you to grasp is that, in essence, insiders vote with their wallets.

Every time they pile into a stock, they are in effect saying that with everything they know about the company – including all sorts of material, nonpublic information – they believe it is selling for less than it’s worth.

And that is an excellent signal.

So if you’re looking for a stock market system that is easy to understand, intuitive and effective, look no further than insider buying.