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Making Money Off Insiders

"Focusing on attractive small and mid-cap stocks that insiders are buying"

Making Money Off Insiders

Apr. 25, 2019 8:05 AM ET

A wise man will make more opportunities than he finds.” ― Francis Bacon

One of the things I have found in my now over three decades of investing in the stock market is this. The only way to consistently outperform the overall market is identify and action stocks, sectors and niches that are overlooked or under weighted by the majority of investors.

Unfortunately, it is hard for most investors to fully embrace this sort of contrarian investing. Humans tend to be much more comfortable when their views are deeply within the norm. This is one of the key reasons most investors, and for that matter, fund managers; consistently underperform the overall market.

One niche I have to be consistently profitable and that has yielded outsized returns over the years is to follow the insiders especially when they are making significant purchases in attractive small and mid-cap stocks. I have doing this consistently for many years in one-off situations but never had put together a portfolio of these sorts of small and mid-cap holdings insiders were buying.

That changed on June 30th, 2016 when we launched The Insiders Forum offering on Seeking Alpha. We started with a hypothetical $150,000 model portfolio consisting of 15 $10,000 positions in attractive small and mid-cap stocks insiders were making significant purchases in. Unlike the model portfolio of the Biotech Forum, this portfolio was diversified across many sectors of the market including technology, transportation, housing, retail, industrial and yes biotech concerns.

How has it worked out to date? As the market close yesterday, the Insiders Forum model portfolio has generated an overall return of 56.32%, nearly double that of the 31.12% an investor would have realized by holding the Russell 2000 over the same time frame.  Thanks to reinvesting profits, our original 15 holding model portfolio worth $150,000 has grown to 23 positions and is worth $234,473.05. This is nearly $40K more than investing in the Russell 2000 ($196,683.34) over the same time span. We also have enough cash or 'dry powder' in the portfolio to add two new stocks over the coming weeks to bring the portfolio up to our optimum 25 holdings. 

Not surprisingly given this level of performance, The Insiders Forum has generated very positive reviews from our subscribers. Here are several or our recent member reviews.

1. Automatically deployed as a basket allocation within my portfolio. Perfectly satisfied with results to date. Highly recommended.

2. Many know the true words of Peter Lynch about insider buys. The great news is - this service leverages them and presents opportunities with insider activity that often prove relevant in hindsight. Bret‘s communication provides well-founded opinions for adding and closing positions, which resulted in nice gains so far.

3. Many, many good ideas. I'm always surprised by the number of great ideas, amount of follow up and his willingness to answer questions. You can make money following Bret.

Has your personal portfolio came anywhere close to that return over the past 11 quarters? I would encourage you to pull up your quarterly brokerage statements to ascertain what kind of returns your current portfolio is actually producing. If you are like most investors, it is probably less than you think. This is human nature and is also the reason more than 90% believe we are better than the 'average' driver according to polls.

To celebrate our remarkable performance to date, we are not only enabling 14-day totally risk-free trials but also offering 20% discounts off your first year of membership should you decide to stay in the Insiders Forum community. Membership includes access to our model portfolio, weekly investment analysis on new small cap stocks insiders are buying, notification of portfolio changes and access to our Live Chat community.

We often miss opportunity because it's dressed in overalls and looks like work” ― Thomas A. Edison

So don't wait any longer to 'test drive' The Insiders Forum. This special offer will only last until the market close on Friday. To activate your risk-free trial into The Insiders Forum, click HERE by 4pm EST Friday.

Thank You & Happy Hunting,

Bret Jensen

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