Before we get to our regular programming this week, I wanted to briefly touch upon the macro environment and the significant market turmoil we experienced last week. I wrote down some brief thoughts last Friday about my experience navigating both the 2008-2009 and the 2020 bear markets in a tweet here and one of the questions I received was about insider buying during a period of crisis.
My response is given below:
Last week, the insider sell/buy ratio did get down to the 10 level and I think it will go down even lower in the coming weeks. The insider purchase we are discussing this week happened in the midst of this turmoil when a well informed insider with a long history in his industry decided to make a purchase.
Beyond looking at insider purchases for sources of ideas over the next few weeks, there are a couple of other tactical trades that are worth considering.
Tactical Trade 1
The first one is a mean reversion volatility trade I discussed in a mid-month update titled Volatility and Howard Hughes. Times of crisis and heightened volatility offer this setup, which I outlined as follows: