Selling Everything - The Next Crash Is Coming
Published: 2022-08-05
Status:
Available
|
Analyzed
Published: 2022-08-05
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Corporate insiders selling stock at a high pace suggests a potential market drop is imminent.
"corporate insiders have been selling their stock at the fastest Pace since January sending the signal that maybe we're about to see another drop after all"
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Insider transactions have a historical track record of accurately predicting market peaks and bottoms, as demonstrated in 2008-2009 and 2019-2020.
"Insider transactions have successfully predicted the market peak in 2008 and the market bottom in 2009. They sold in late 2019 before buying again in March of 2020"
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Insider activity historically predicts market rallies and bottoms. Current insider selling may indicate an upcoming market drop.
"since 1992 they've correctly predicted the next rally even buying up the bottom just a month ago so now that they're selling again does this mean we're about to see another drop coming soon"
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A study found that insider transactions, when extrapolated over a year, outperform the S&P 500 by nearly 20%.
"throughout every single time period they outperform the market if you extrapolated that throughout the entire year that would result in an almost 20 percent higher return than the S P 500"
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Studies indicate that insiders tend to buy stock before price increases and sell before price declines.
"insiders purchase stock prior to abnormal rises in stock prices and sold stock prior to abnormal declines in stock prices"
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Insider investors are identified as contrarian and possess superior market timing abilities compared to general contrarian strategies.
"insiders are contrarian investors and can time the market better than a simple contrarian strategy"
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High conviction insider stock purchases have historically resulted in an average excess return of approximately 21% over a 12-month period.
"high conviction Insider purchases generated an average 12-month excess return of almost 2 21 percent"
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Cluster buying, where multiple insiders trade around the same time, is a highly predictable indicator of future stock market growth or decline.
"cluster buying this is where individuals all buy or sell around the exact same time and in 2017 study found that this was usually the most predictable signal for future stock market growth or an impending decline"
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Bear markets historically feature multiple rallies of 5% or more, with some reaching 10% or higher, occurring during 21 bear markets between 1901 and 2015.
"during bear markets it's incredibly common in fact Investopedia notes that every bear Market between 1901 and 2015 spawned at least one five percent rally in rallies of 10 or more interrupted 2 3 it's at the 21 bear markets over that span"
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Deeper market declines are often followed by larger rallies. For instance, the 1929 crash saw a 48% rally before an 86% fall.
"the deeper the decline the higher the rally for example in 1929 the Dow Jones increased by 48 percent before then falling 86 to a brand new bottom"
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Major market crashes like the dot-com bubble and the 2008 financial crisis included multiple bear market rallies, with some significant gains before further declines.
"the .com crash also had eight bear Market rallies of at least 18 percent and four gains of 30 percent before then dropping even further the same was also found throughout the 2008 great financial crisis which saw nine bear Market rallies between 6 and 24 percent before eventually bottoming out after two years"
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Bear markets that occur during recessions typically see an average decline of 35% and last for approximately 15.3 months.
"bear markets that coincide with recessions tend to decline nearly 35 percent on average and last for 15.3 months"
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In the absence of a recession, bear markets tend to see an average decline of 25% and last for over nine months.
"stocks decline an average of 25 percent than a non-recessionary bear Market to over nine months"
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Increased insider selling relative to buying may signal an impending market downturn.
"even though insiders are selling more shares than they're buying it could be a signal that the market is about to see another drop"
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