Can Insider Trading Information be an Effective Tool for Investment Managers?
Muma Business Review
• Volume 2
• 2018
• pp. 055-061
The Legend of Martha Stewart: Insider Trading
For decades institutional investment managers and individual investors have searched for different ways to make outsized returns in the stock market. Finance theories were created by academics to suggest that this task is not possible because the market is efficient. However, as a scholar-practitioner, I have come to realize that Insider Trading disclosure data provides a unique information signal that can be used as an effect tool for identifying investments at the company level.
For decades institutional investment managers and individual investors have searched for different ways to make outsized returns in the stock market. Finance theories were created by academics to suggest that this task is not possible because the market is efficient. However, as a scholar-practitioner, I have come to realize that Insider Trading disclosure data provides a unique information signal that can be used as an effect tool for identifying investments at the company level.
Insider trading; Inside information; information content; Sarbanes-Oxley Act; Efficient market hypothesis; Stock returns; Insider transactions; Electronic filings; Financial market anomaly.
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