Falling Asleep at the Wheel-American Investors Fully Invested While Many Corporate Insiders Remove their Capital From the Market
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Photo Credit: Barchart 9/13/25
By Stan Szymanski
This is not financial advice. For informational purposes only.
If you have ever taken a long car trip to go somewhere across the United States you know that it may take you several days to get to your destination. To get there as expediently as possible you drive long days-8, 10, 12 hours a day or more. After it gets dark and you have already driven 500 miles or more that day, you either have the common sense to pull over and get some shuteye so you don’t fall asleep at the wheel and risk your life or you ignore the risk and keep going.
I have outlined the above situation to draw an analogy to the the current complacency that adorns the investment portfolio of many Americans. Like the proverbial frog that was boiled alive because he did not recognize that the temperature in the pot was slowly being increased as he enjoyed his swim-so too is the fully invested American stock market investor who does not realize that it may time to consider getting off of the road before they experience a crash that will change their lives for the worse. Again to be clear-this is not investment advice.
Most investors in 401(k), 403(b) plans and the like have never considered if what they own is a good value with good prospects or if is totally overvalued. Many never consider if they were becoming new buyers today of the general stock market (let’s say because they came into some money) they would never in good conscience put all of their nest egg into it.
Yet that is what complacency has done to many operating by a ‘if it ain’t broke don’t fix it’ management philosophy. The apparent success of the stock market as measured by the raw numerical indicies of the Dow Jones Industrials or the Standard and Poor’s 500, stand now at record high levels. Many people use index funds in their retirement accounts to achieve what they hope is a comfortable retirement. But how can one tell if the market is expensive and which way the wind is blowing?__________________________
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One general measure is the markets’ P/E Ratio:
Price Earnings Ratio Formula
P/E = Stock Price Per Share / Earnings Per Share
…’The Price Earnings Ratio (P/E Ratio) is the relationship between a company’s stock price and earnings per share (EPS). It is a popular ratio that gives investors a better sense of the value of the company. The P/E ratio shows the expectations of the market and is the price you must pay per unit of current earnings (or future earnings, as the case may be). (Corporate Finance Institute)
Simple, right? But is the current market cheap or expensive According to Current Market Valuation it is strongly overvalued:
…’The P/E ratio is a classic measure of a stock's value indicating how many years of profits (at the current earnings rate) it takes to recoup an investment in the stock. The current S&P500 10-year P/E Ratio is 37.1. This is 80.9% above the modern-era market average of 20.5, putting the current P/E 2.0 standard deviations above the modern-era average. This suggests that the market is Strongly Overvalued.’…(Current Market Valuation)
The recently retired Warren Buffet has a favorite stock market indicator that he likes to use for general market valuation called the ‘stock market capitalization-to-GDP ratio’ or ‘the Buffett Indicator’:
…’The stock market capitalization-to-GDP ratio, also known as the Buffett Indicator, is a measure to assess whether a market is undervalued or overvalued compared to historical standards. This ratio divides the total market cap by the country's GDP, offering insights into market valuation that can guide investment strategies.’…
…A ratio below 75% suggests a market is undervalued, while a ratio above 115% indicates overvaluation.‘… (Investopedia)
According to MacroMicro the current ‘Buffet Indicator’ is 217.14%.
I do not think that Mr. Buffet would call this market anything but expensive. Perhaps that is why Buffet/Berkshire Hathaway are currently sitting on $344 Billion in cash.
But Mr. Buffet is not the only one raising cash these days. A wide swath of corporate insiders are selling their market holdings, of a company of which they hold a position of leadership, in favor of cash.
barchart.com tracks the buying and selling activity of corporate insiders. Barchart reports that during the last 60 days:
-Meta Platforms (META) and T-Mobile US (TMUS) each had twenty (20) insider sales and ZERO purchases.
-Carvana (CVNA) had 41 insider trades: ZERO buys and 41 sales
Of the top 4 Highest Trade Values in the last 60 days:
-Fox Corp (FOX) had 2 sells and 1 buy totaling over $4.5 Billion
-News Corp (NWS) had 2 sells and 1 buy totaling over $2 Billion
-Amazon (AMZN) had 4 sells and ZERO buys totaling over $1.5 Billion
-Verisign (VRSN) had 10 sells and ZERO buys totaling over $1.2 Billion (Barchart)
According the data from the Gallup organization earlier this year, the percentage of Americans who own equities is at a record high of 62%.
So this means that there has never been a time in American history where, on a percentage basis, so many U.S. Citizens owned stocks. When one looks at the chart at the top of this article of the activity of corporate insider sales, does not one have to ask the question, ‘What do they know that I don’t?’:
IMHO, many corporate leaders who work for publicly traded companies have decided to pull over for the night because it is getting dangerous on the open road. While titans of industry take a respite, the average American investor is unconscious to the fact that they are actually asleep at the wheel. As of today, the road has been straight for the unwary; what happens when they don’t see the ‘Road Closed’ sign up ahead and do not take evasive action? It may be an accident of epic proportions. As portfolio manager Michael Pento has recently stated ‘The Exit Door Is Closing’.
IMHO, when the people who are running a business decide that the best course of action is to sell the business (the stock they own), one should sit up and take notice. Again, IMHO, a bull market in commodities has taken hold and especially in the United States, the era of good times in financial assets is coming to a close. I am not saying that this is the absolute top of the stock market; but if it were me-I would start looking for a roadside motel.
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Stan Szymanski (or Encouraging Angels) is not a medical doctor. This is not medical advice. In all matters pertaining to the health and care of a human being consult a medical doctor. This is not legal, financial or personal advice. Consult appropriate professionals in those