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Inside scoop

Entrepreneur, June, 2003 by Jennifer Pellet

In today's volatile market, who doesn't want an inside track to stock-price gains? Now, investors have a better shot at getting one. While insiders once took as long as 30 days to make trades public, the average is now closer to 10 days, which means investors can keep tabs on when corporate execs and directors start dumping or gaining stock and get in on the action early enough to benefit from the inside scoop.

But the method isn't foolproof, says Jonathan Moreland, author of Profit From Legal Insider Trading: Invest Today on Tomorrow's News (Dearborn Financial Publishing) and the director of investment research newsletter Insiderlnsights.com. "Insider trading data is an excellent first screen for investors, but people have to do research,,, he says. "For example, look for several insiders increasing their holdings rather than a single purchase by a CEO cheerleading his own firm."

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Moreland also looks for a track record of buying and selling correctly. "There are insiders who have only purchased," he says. "If the stock came down and they didn't sell, you wonder if they're just cheerleading when the stock is down."

JENNIFER PELLET (jpellets@aol.com) is a New York City-based freelance writer specializing in business and finance.

Business Services Industry

Inside scoop

Entrepreneur, June, 2003 by Jennifer Pellet

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