Investment U<\/em> Video Archive<\/a><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\nThis week: corporate insiders are selling, a lot, but Jeremy Siegel says look for 17,000 on the Dow, Hitachi is glowing in red-hot Japan, and the SITFA.<\/strong><\/p>\n![\"Hitachi](\"http:\/\/www.investmentu.com\/wp-content\/uploads\/2012\/04\/hitachi-hit.jpg\" "\\"Hitachi")
This year alone, Hitachi (NYSE: HIT) raised its full year profit forecast by 40%, and its shares are up 31%. But will Hitachi’s success continue?<\/p>\n<\/div>\n
According to the Thompson Reuters, a dollar-based ratio of insider corporate sales, was at 40 this past week and 35 the week before. Twenty is considered a negative market indicator.<\/p>\n
It has been above 20 for six of the last 10 weeks.<\/p>\n
Insider selling isn\u2019t a perfect indicator of the market, but the last time it was this high was last May just before the summer sell-off.<\/p>\n
The Journal<\/em> also reported a steady flow of money out of stock mutual funds and into yield-oriented investments, bonds and dividend-paying stocks.<\/p>\nBut, on the other side of the coin, Barron\u2019s<\/em> reported that professional traders have bought into the stock rally at a 77% bullish reading by the Consensus Index.<\/p>\nThis April is looking very much like the last two with professional traders bullish, volatility low and prices for most big caps not looking too stretched at the moment.<\/p>\n
So the picture is ambiguous at best.<\/p>\n
But not for Jeremy Siegel.<\/p>\n
Jeremy Siegel is one of the most respected minds in the money business and an economics professor at the University of Pennsylvania. When he talks, the money world listens.<\/p>\n
He sees this market as cheap compared to bond yields. In fact, one of the cheapest he\u2019s ever seen, and that goes back quite a ways.<\/p>\n
He also thinks it cheap based on historical data and returns five and 10 years after really bad markets.<\/p>\n
He\u2019s optimistic for a lot of reasons.<\/p>\n
The ECB has put off its crisis and that has eased a lot of fears in the market.<\/p>\n
Earnings are good and we have low interest rates.<\/p>\n
He believes rates have to move up and that will drive more investors out of bonds and into stocks.<\/p>\n
And, he\u2019s not at all worried about inflation and stated that history tells us the bulls will run for one to five years even after the Fed tightens.<\/p>\n
So, two very different market perspectives, but I\u2019ll tell you, for my money, Siegel is the man.<\/p>\n
Historically, insider selling isn\u2019t as good a predictor as insider buying. I think the bulls still have room.<\/p>\n