Wall Street’s Most Misunderstood Signal Just Fired Again

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“Anyone who used Bezos’s selling as a signal would have missed the run from $1 to $200.”

Karim Rahemtulla, Co-Founder, Monument Traders Alliance 

Karim Rahemtulla

Dear Reader,

Jeff Bezos has sold over $30 billion of Amazon stock since 2002.

Anyone who used Bezos’s selling as a signal would have bailed out of Amazon at the first SEC filing and missed the run from a split-adjusted $1 to over $200.

That selling is what made Bezos the second-richest person on the planet, and the financial media still treats it as a warning.

That is the trap insider selling sets, and the financial media falls for it every quarter.

Last year alone, Mark Zuckerberg sold $2.2 billion of Meta stock.

The headlines treated it as a warning sign, and Meta gained 82% the same year. Zuckerberg was selling into all-time highs, and the financial press called it bearish anyway.

The Research Says…

Bill Gates has been selling Microsoft for 30 years, and Microsoft has gone from under $50 to over $400 during that time. The Walton family’s selling pattern works the same way: billions of dollars unloaded over two decades while Walmart kept making all-time highs. The pattern is the same every time.

This is not a small data error. It’s an entire framework that financial media has been getting wrong for forty years.

The academic literature is unambiguous on this.

A study by Francois Brochet at Boston University found that insider sales “have often been found to bear little to no association with subsequent stock returns,” and academic research going back to the 1980s has reached the same conclusion.

Insider buying predicts returns, while insider selling predicts nothing.

Here’s why…

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How the Rich Operate

Insiders sell for reasons that have nothing to do with the company’s prospects:

  • Diversification because their entire net worth is tied up in one stock
  • Estate planning because they have to
  • Lifestyle because they want a house or a yacht or – in Larry Ellison’s case – an entire Hawaiian island
  • Tax advice because their accountants recommend it as standard practice.

The taxes are actually the cleanest explanation.

When a founder sells stock at long-term capital gains rates, they pay 20%, but if they took the same money as salary, they would pay 37%. The tax code rewards insider selling, which makes it a feature of the wealth-management system rather than a verdict on the business.

Wall Street has gamed this so thoroughly that some founders pay zero tax on their lifestyle by never selling any shares.

Ellison funds his life by borrowing against his Oracle stock, deducting the interest, never repaying the principal, and keeping the shares intact for the next generation. This is how the actual rich operate.

The opposite transaction is the only one that matters.

When an insider uses their personal account to buy their own company’s stock with cash, they are doing so for one reason: they think it is going up.Logo

YOUR ACTION PLAN

Insiders are already loaded with options, restricted stock, and equity grants. The last thing they need is more shares, which is why a personal-account purchase is the only insider signal worth tracking.

I started buying a select group of software stocks last week based on exactly that signal.

The insider buying inside this group has been some of the heaviest I have seen in the tech sector in years, and the stocks are all sitting at or near 52-week lows because the market has been throwing them out with the AI panic.

The setup looks like the kind that pays for years.

The names and the position structure are inside The War Room.

Click here to join The War Room.Want more content like this?

TESTIMONIAL TUESDAY

“STC 2.11 25% win! thx BB”
– Werner, The War Room Member

“Closed 3 contracts yesterday with an over all 57.3% net gain. Thanks BB”
– Pete678, The War Room Member

“Nate B, what a great TWLO idea. Scaling half of 200c for 147%”
– Kavi, Daily Profits Live Subscriber

INSIGHTS YOU MAY HAVE MISSED

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Monument Traders Alliance, LLC

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Published by RJ Hamster

I was born on 6 August 1956 in San Francisco, California to Janet and (the late) Richard Hovis. I grew up in Santa Monica, California where I attended elementary, junior high school, and high school (graduating in 1974), in addition to involvement in sports and recreation (Little League +, the Boy’s Club ++). Further, it was in elementary school – St. Augustine’s By-the -Sea Parish School that I found, and made the choice to truly journey with God. I attended Arizona State University from 1974 to 1977 – seeking to become an architect, however, I was not accepted, and, as such, I graduated with a Liberal Arts degree. Upon graduation from Arizona State University, I attended Cal Poly San Luis Obispo and studied City and Regional Planning at the Master’s level. I successfully completed one (1) year in a two (2) year program – I did not complete the Master’s degree in City and Regional Planning – due to personal reasons. I returned to Santa Monica where I started (October 1979) my career as graphic designer with Exxon Company, USA. I spent five years with Exxon Company, USA. While working with Exxon Company, USA I was accepted into architectural school – Sci-Arc in Southern California, however, I did not attend preferring to stay with Exxon.. In 1982 I married Laura Flosi and in April 1983 we had our one and only child – Lauren Alain Hovis – a gift from God. We moved to Phoenix, Arizona in 1984 from Los Angeles, where I went to work as a graphic designer with Kitchell CEM (from 1985 -1987). From 1987 – 1995 I was an independent contractor, and a registered representative in mortgage finance, financial management, graphic design, and drafting. Further, I attended the University of Phoenix and successfully obtained a Master’s in Business Administration (MBA) in 1982. I was also a member of the Scottsdale Jaycees, where I became very involved in community events and projects. In 1994, I accepted a cartography position with the Defense Mapping Agency in Reston, Virginia. As such, I relocated from Phoenix to Reston. In 1998, I was accepted and worked as a Visual Information Officer with the Central Intelligence Agency. In 2002, I worked as a Support Officer until my retirement (due to a need for shoulder surgery) in September 2018. Away from my Federal Government service, I have been involved in various organizations and activities in Northern Virginia. In November of 2011, I married Rebecca Ouellette in Santa Monica, California. I reside in San Tan Valley, AZ with my two hamster - Jess and Timothy, our fish, our lizard - RJ Lizard., and our cats - Pearl and Grey. As to hobbies, I enjoy playing sports, attending sporting events, mentoring individuals from financial management to hamsters, building models, photography, travel, multimedia design, managing partner for RJ Hamster, and jazz – smooth jazz to a samba or a bossa nova. Love and God Bless, Peter – aka RJ Hamster Jo hi

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