Celebrating Incompetent Insider Stock Buys

The investor capacity to lie to themselves is truly an awesome thing to witness.The most recent example is the rally in bank stocks ostensibly caused by CEO, Chairman and Board members buying shares.It is nothing short of absurd.

Bank of America CEO Ken Lewis bought 200,000 shares ($1.2 million), while JPMorgan Chase CEO Jamie Dimon purchased 500,000 shares ($11.5 million). Six other BAC board members bought more than 500,000 common shares also.

The market celebration seems odd, when you consider that the poor strategic acquisitions, inept risk management, and otherwise errant policies that drove these stocks down 90% from their peaks were the brainchilds of these same insiders.

Given the past track record of their corporate investing acumen, the insider purchases by this group of ne’er-do-wells should hardly be cause for jubilation.

Then there is this additional tidbit: These insider purchases were made from the proceeds of ill-gotten gains — the vast sums of money that management has been overpaid for the fine job they did driving these companies into the dirt.

The thought process must have gone something like this: Now that we have been paid 100s of millions for turning our stock price into fertilizer, let’s take a few cents of that money and buy a few shares of stock.

The entire sordid episode is sickening, and hardly cause for investor appluase. Instead of buying stock, these incompetant corporate clowns should be falling on their own swords. If they don’t do so soon, it will be time for investors to start gathering pitchforks and torches, to chase the money losing managers out of town.


Originally published at The Big Picture blog and reproduced here with the author’s permission.

2 Responses to "Celebrating Incompetent Insider Stock Buys"

  1. Anonymous   January 22, 2009 at 11:58 am

    SHORT SELL BANK OF AMERICA (BAC)NOW!!!IF BANK OF AMERICA STOCK FALLS BELOW $5 PER SHARE, RULES OF INSTITUTIONAL OWNERS MAY REQUIRE THEM TO SELL THEIR BAC HOLDINGS. THE OTHER DAY THE STOCK CLOSED AT $5.10, APPARENTLY REFLECTING THE SCRAMBLING BY SOME TO SUPPORT THE STOCK PRICE.ACCORDING TO TEH “SHORTSQUEEZE.COM” WEBSITE, 44.10% OF BAC IS HELD BY INSTITUTIONAL LENDS. WHILE SOME DO NOT HAVE THE $5 PER SHARE LIMIT RULE, THE SELL OFF OF BAC COULD BE MASSIVE IF THE STOCK GOES BELOW $5, SENDING BAC PLUNGING TO GREATER LOWS.BAC HAS TREATED ITS CUSTOMERS IN INAPPROPRIATE WAYS FOR A LONG TIME. FRANKLY, I WAS ONE OF THOSE CUSTOMERS LIKE MANY OTHERS ACROSS THE US. IF BAC FELL, DEPOSITERS WOULD TAKE A LOT OF THEIR MONEY TO LOCAL BANKS, BANKS WHO ARE IN FACT LENDING AND SUPPORTING THE US ECONOMY. IT IS TIME FOR BAC TO GO!!!SHORT SELL IT NOW. WHILE THE ELECTION IS OVER, YOU CAN VOTE BAC OUT WITH YOUR DOLLARS. EACH ONE OF YOUR DOLLARS IS A VOTE. EVEN IF YOU CAN ONLY AFFORD TO SHORT SELL A FEW DOLLARS OF THE STOCK IT COUNTS.REMEMBER OBAMA GOT ELECTED BECAUSE MANY OF US SUPPORTED HIM WITH JUST A FEW DOLLARS. VOTE BAC OUT TODAY

    • Anonymous   January 23, 2009 at 4:35 pm

      If BAC will go , tens of thousands of jobs will be lost.I’m not surprised that you woted for obama.IQ well below 100.