Keeping Score on Insiders' Trading Success

When you think about it, insider trading should be the king of stock indicators. Who knows more about a company's real situation after all than its managers, directors and biggest investors? If what they're seeing leads them to buy or sell, that should pretty much be the final word, right?

And yet -- admit it -- you pay little, if any, attention to what the insiders are up to at your favorite companies.

Same here, mostly because this stuff is hard to interpret. How much insider buying does it take to produce a buy signal, for instance? Does it matter if it's just one person, or do you need the whole management team to make it real? How many insiders have to sell before normal profit taking becomes rats jumping ship? And what about all those cases of insiders and/or companies buying stock, only to have the stock tank? Despite being close to the action, these guys seem to be wrong almost as often as the rest of us. ...