CEOs Expect a ‘Serious Good Time’ While Dumping Stock!!
By Daniel at 15 December, 2009, 12:01 am
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Maybe there’s a serious good time in the multimillion dollar executive mansion market. As for the rest of us, serious is more the word than good time.
Toll Brothers CEO Expects a ‘Serious Good Time’ While Dumping Stock
In an interview with Bloomberg Friday morning Bob Toll, CEO of Toll Brothers, says the housing market is “coming back”. He sees the pressures in real estate alleviating as consumers rebound and government programs help boost up the market. Toll says we’re on the verge of a “serious good time”:
I don’t see prices going down any longer. I think you’re gonna see them start to go up. As they accelerate we’ll get closer to a serious good time again, but we’re not there yet. - CEO of Toll Brothers
“Despite this, the Toll Brothers CEO has dumped hundreds of millions in stock and company execs continue to dump shares on the market as we speak. For Bob Toll, it looks like a win-win. His “serious good time” scenario will result in further profits (and bonuses) whereas he has essentially hedged himself from massive losses (via his stock sales) if the real estate market retrenches. For the American public the scenario is a bit different. The “serious good time” means the bubble is coming back to American real estate. We all know how that will end. And buying Toll stock from the man who sold it? Well, that will likely turn out the same way….
Insider Selling Soars with Rally
Insider selling surged in the latest week from $960MM in sales to over $1.39B. Buying made a drastic improvement from $29MM to over $166MM. The improvement in buying is a positive sign, but the vast discrepancy in selling continues to overshadow the buying.
Insiders are clearly viewing the run-up as a selling opportunity. This is consistent with the very tepid recovery we’ve seen in organic revenue growth thus far during the economic rebound. Executives are still unlikely to invest their personal fortunes in the companies they run due to the fact that they aren’t seeing the organic growth that so many equity buyers are hoping will develop once the government steps aside and stops propping up the economy.
Thus far, there are little to no signs of this occurring and this is perhaps most evident in the personal use of insider buying and selling.”
This picture pretty well says it all, doesn’t it? Executives are the people with the best information - and they’re jumping ship while they still can.
So much for the ‘captain going down with the ship’ eh?
AFTER THE BOOM THERE WILL BE A BUST….
“We’re at a truly fascinating crossroads in modern economic times. Financial theory as we have come to know it will be changed forever based on the recent actions of Ben Bernanke and global central bankers. Millions of textbooks will be rewritten in the coming 10 years and careers will either flourish or die on the back of the actions of these bankers. Those in favor of Bernanke’s legendary helicopter drop are celebrating a 6 month rally in equities, but a vital piece of the recovery puzzle remains missing. While Bernanke and Co. fire up the printing presses, and the banks sell the recovery hook line and sinker to the investing public, we continue to see very weak consumer trends.”
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
No comments yet.