I was talking with a fellow investor about Gold, and how we both believe it going up long term. However, he made an interesting observation which I am trying to figure out - if Gold was going to go higher, and thus affect the gold mining stocks, why are insiders in benchmark companies selling like crazy?
A smaller company, such as GSS seems to have lots of insider buying.

My question is - if gold really is headed higher, why are executives in NEM dumping shares? Any ideas?

you'll never know why someone is "raising cash". maybe they want to diversify their portfolio. maybe they want to by a house. maybe they're going to vegas... maybe, maybe, maybe... there's no way to know.

sure - if the top dogs are dumping ALL their shares - look out. but if they're just lightening up a bit... no biggie.

i'd view insider selling as a secondary indicator. that's just me.

-ja

Kevin,

We discussed this issue in a thread a couple of weeks ago. See..

http://www.network54.com/Forum/thread?forumid=251727&messageid=1108044808&lp=1108051675>

Also, Bill Fleckenstein wrote an article on this a few weeks ago. Bill has long been a bull on Newmont and Pan American Silver. In fact, his analysis was a key reason that I bought my original shares of NEM and PAAS in March of 2003 when NEM was at 24.5 and PAAS was at about 6.5. Here's the article...

http://moneycentral.msn.com/content/P72745.asp

By the way, Bill sits on the board of PAAS.

As I've said about mining stocks many times before, it just depends on why you own them. If you own them as a hedge against a falling dollar with a relatively small percentage of your investment capital you shouldn't be worried about it because you're not going to sell it for a long time. On the other hand, if you own it just because you think it's a sector that's going higher, you should be using trailing stops. In either case, insider trading shouldn't be a concern.

Larry