For investors, nothing provides more confirmation of their investment thesis than a team of bullish executives. After purchasing stock, it feels great to see the CEO or V.P. at the company really being bullish on the firm’s prospects or future. I mean, if insiders are pleased with the business then I must have made an excellent choice when it comes to the stock I decided to buy, right?
Well, not exactly.
It turns out, CEOs with truly bullish takes on their own companies are doing almost the exact opposite to what you think they’re doing. They’re selling their shares and hitting the ground running.
For investors, you may want to take bullish CEOs with a grain of salt.
A Contrary Tone
Paying attention to the nuance of language could save you from some future losses – especially when it comes from the mouths of a CEO. At least, that’s the results from a new study by Lehigh University, the University of Central Missouri and the University of Hong Kong. The trio of colleges found that often, Chief Executives aren’t exactly following their own language or “bullishness” when it comes to their personal stock holdings.