Insider investment strategy

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Insider investment strategy means following what company insiders buy or sell. Insiders often have more information, so they may have an advantage. Only a few funds track insider trades. In the United States, Catalyst Capital Advisors LLC runs the Catalyst Insider Buying Fund, a large-cap, long-only fund that buys only when insiders are buying on the open market. In Europe, Dovre Forvaltning UAB runs the Dovre Inside Nordic fund.

A study by Lorie-Niederhoffer suggests that careful, timely analysis of insider data can be profitable. In 2014, Dovre Forvaltning shared findings on insider influence in the Nordic region. They built yearly portfolios from insider purchases and sales, using these rules: only transactions above 80,000 SEK counted (about 33% of trades were excluded for being too small). If there were no purchases or sales within 1, 3, or 6 months after a company was included, it was dropped from the portfolio. All stocks were equally weighted. The analysis showed that ...