Finweek English Edition - - INVESTMENT -

I have al­ways ig­nored direc­tor deal­ings to a large ex­tent, with a few ex­cep­tions. Those would in­clude lots of big sell­ing by an en­tire board, and zero-cost col­lars that es­sen­tially re­duce the share price up­side but also limit down­side, and tell you the di­rec­tors feel the share is over­priced. Vanilla deal­ings I ig­nore, and Wayne Sam­son’s pur­chase of 100 000 El­lies shares at 611c in Oc­to­ber last year was just such a trade to ig­nore. At the time the mar­ket got all ex­cited and the share ran higher for a brief pe­riod. It is now trad­ing more than 50% lower than that 611c price. The point is that di­rec­tors might have ex­tra in­sight into their com­pa­nies, but are they any bet­ter at valu­ing the busi­ness than the rest of us? The short an­swer is no. They’re not stock an­a­lysts, they run com­pa­nies. Deal­ings should be put away in file 13 (i.e. the dust­bin) and mostly ig­nored.

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