Making money in the stock market is pretty simple.
All you need to do is buy quality businesses when they trade at attractive prices.
However, it’s not always easy to figure out what an attractive price is.
That’s why I really like this hack…
Follow the insiders — senior officers, directors or owners of more than 10% of the company’s stock.
They have information about the business that’s unavailable to outsiders. If anyone knows what an attractive price is, it’s them.
That’s why I sat down with Alex Green, The Oxford Club’s chief investment strategist.
Alex has done an outstanding job of making money for his readers by following the insiders. It’s the foundation of his investing approach in his premium research service, Insider Alert.
And today, Alex and I discuss one of the companies on his radar right now that’s seeing insiders buying shares.
Click on the play button below to hear our Real Talk about it.
Regards,
Founder, Alpha Investor
P.S. Alex also has three more companies on his radar right now that are seeing insiders buying shares.
And he’s put together a special presentation to share the details with you.
To find out how to take advantage of these opportunities, check out Alex’s invitation for you right here.
Transcript
Charles Mizrahi: You’re seeing an opportunity now with a stock that’s trading at a relatively low price. I think it’s $5 or so. It’s a private aviation company in my neck of the woods, New York. I’m not going to give any more away than that. And you’re seeing crazy insider buying that started in 2021?
Alex Green: Mm hmm. Right. There is an upside to economic inequality. And that is there are a lot more people and companies who don’t like all the hassles of flying, mask-wearing, security and standing in line or whatever. They can timeshare jets, essentially, and go where they want to go when they want to go.
The cost has come down, and the convenience is up. It’s a great service. I often see PGA Tour players walking around this company’s logo on their caps. I’m sure that they’re getting a ride to the next tournament as a result.
But again, I can do all my fundamental analysis, and I can feel good. But on top of that, you have insiders buying millions and millions of dollars’ worth of stock themselves. I view it as confirmation that my fundamental analysis is correct.
Charles Mizrahi: So, you’re seeing in this small company’s price — I don’t know if it moved much since you started talking about it. But from what I gather, it’s more or less where it’s at when you started looking at it. Because the market has been going down — which is a godsend. Now, investors can get into this at more or less the same price that insiders are getting into it.
Insider Edge
Alex Green: Let me mention this, Charles. I always think that if anybody is going to put forward a strategy, they should talk about why it should work — which we just did. I think they should also talk about why it might not work.
For instance, maybe you were a hotelier two and a half years ago. And you could see that your business was doing great. You had new hotels going up. You had a high occupancy rate. You were refinancing your debt at lower levels. Your cash flow was great. Your balance sheet was strong. And you might buy shares. And then, all of a sudden and out of the blue, comes COVID-19.
Insiders are not omniscient. But they do have an edge. You don’t have COVID-19, 9/11 or the invasion of Ukraine happening every other month. And usually, they’re correct. So, no system is infallible, and insiders themselves are not infallible.
But when they feel so confident that they’re willing to invest millions of dollars of their own money, should you put a few thousand dollars of your own money up there beside them? I think the answer is yes.
Charles Mizrahi: Yeah. When the chef eats his own cooking, it doesn’t get any better than that. In my career, when I’ve seen cluster buys of insiders who I’ve followed in companies that I’ve [recommended] — Marvell was one example. And you look at that, and it’s like everything starts lining up. Like I said, it’s a one-foot hurdle.
Alex Green: Yeah. It’s great when you have the CEO, chairman or the chief legal counsel buying. But when they’re all buying at the same time — a cluster buy, as you put it — it’s further confirmation. They all realize. They’re obviously talking to each other every day anyways. But they’re all saying: “What the heck? Look at the price of our stock at the market? I’m going to buy a few million dollars’ worth.” And the other one goes: “I’m going to buy a few million dollars’ worth, too.” Again, it’s just further confirmation. It’s not just a lone ranger out there buying the stock. You’ve got other insiders buying as well.
Weighing Probability
Charles Mizrahi: Right. And I do want to say [something], Alex, and I’m sure you’re going to echo these thoughts. Folks, this is no guarantee. Nothing in life is guaranteed — except death and taxes. You know that. But I just want to say that, even with these insider buys, you can’t screw up. They could buy before COVID-19 — or something unseen happens.
Whatever it might be, in investing, there’s always a probability game you play. You’re weighing the probabilities. Is it a highly-probability event or a low-probability event? And that’s what all great investors do.
That’s what all insiders are doing. They’re making a wager and saying there’s a high-probability event that the stock price will be materially higher two, three or five years down the road. They don’t know. They don’t have a crystal ball, and they can’t see the future. And neither can Alex and I.
So, I just want you to realize that. And I’m sure you all do because my subscribers are highly-intelligent people. This is not a guarantee. If anyone tells you that there’s a guarantee in the market, hold onto your wallet and run!
Alex Green: Right. That’s exactly why you diversify within the market and why you diversify some of your money outside the market. Because as the historian David McCullough likes to say: “There’s no such thing as the foreseeable future.” So, it’s key to take a realistic approach, diversify broadly and asset-allocate properly. And then, time is your ally.
