Tuesday, March 09, 2004
AN INSIDER TELLS ALL
I've really been thinking about this whole Martha Stewart thing. I understand - I think it's nutty - but I understand the "get the rich chick" mentality, but I want to talk about what she actually did...something called, INSIDER TRADING.
Now, given that I'm a complete novice to investing, what exactly does that mean? Insider trading. I usually act (if I have the money to) on my investments when I believe in a company or product that a company produces. I'd like to think that is a majority opinion, but I know it's not true. Insider trading is acting on knowledge that is otherwise not public...am I right there? If not, feel free to explain the rules to me if you'd like in an email...but how is that so wrong?
I work for a public-traded company...and I have certain knowledge of something that may cause the stock I own to go up or down depending on the kind of information I have...is it wrong for me to change my behavior and buy or sell stock on that basis? For instance, the company I work for recently dropped Howard Stern on six of their radio stations...as well as a semi-syndicated talent in Florida. All told, the revenue from those two programs on the stations generated more than 20-million dollars a year. I estimate that the drop in ratings and/or loss of advertisers could be around 2-million dollars (I generally don't believe they'll lose ALL of that revenue). Combined with the outward PR of the move, and some of the inside knowledge I have of the whole issue of "indecency" on the airwaves and the moves being made to affect it, am I breaking the law by acting accordingly?
I may have to buy more Clear Channel stock...
In my book, INSIDER TRADING is acting on information faster than another person. That shouldn't be wrong. If it is SO wrong...then how do our politicians do when it comes to acting on information THEY have...especially when they can force the action?
Proof? Read this story about how politicians are doing with their investment portfolios compared to those of us who are "not in the know"...
Are US Senators real 'inside traders'?
or this one...
In stock market, US Senators beat averages
I've really been thinking about this whole Martha Stewart thing. I understand - I think it's nutty - but I understand the "get the rich chick" mentality, but I want to talk about what she actually did...something called, INSIDER TRADING.
Now, given that I'm a complete novice to investing, what exactly does that mean? Insider trading. I usually act (if I have the money to) on my investments when I believe in a company or product that a company produces. I'd like to think that is a majority opinion, but I know it's not true. Insider trading is acting on knowledge that is otherwise not public...am I right there? If not, feel free to explain the rules to me if you'd like in an email...but how is that so wrong?
I work for a public-traded company...and I have certain knowledge of something that may cause the stock I own to go up or down depending on the kind of information I have...is it wrong for me to change my behavior and buy or sell stock on that basis? For instance, the company I work for recently dropped Howard Stern on six of their radio stations...as well as a semi-syndicated talent in Florida. All told, the revenue from those two programs on the stations generated more than 20-million dollars a year. I estimate that the drop in ratings and/or loss of advertisers could be around 2-million dollars (I generally don't believe they'll lose ALL of that revenue). Combined with the outward PR of the move, and some of the inside knowledge I have of the whole issue of "indecency" on the airwaves and the moves being made to affect it, am I breaking the law by acting accordingly?
I may have to buy more Clear Channel stock...
In my book, INSIDER TRADING is acting on information faster than another person. That shouldn't be wrong. If it is SO wrong...then how do our politicians do when it comes to acting on information THEY have...especially when they can force the action?
Proof? Read this story about how politicians are doing with their investment portfolios compared to those of us who are "not in the know"...
Are US Senators real 'inside traders'?
or this one...
In stock market, US Senators beat averages
Subscribe to Posts [Atom]
