Directors dealings are purchases and sales made by directors of shares in their own companies. They are reported in the weekday and Sunday newspapers, on websites, and in tables at the back of the weekly investor magazines.
The theory behind DD investing is that:
That is the theory. Unfortunately, the assumptions in 1, 2, 3, and 4 don't always hold true. And even if they do, there are all sorts of refinements to the simple rules above.
That's where close inspection of directors dealings tables can come in handy. All the broadsheet newspapers and investors magazines provide information on directors dealings, so you won't have any trouble sourcing the data.
Be careful, though, not to place too much store by directors dealings. If you use them at all, do so to corroborate a view you already hold about a company, rather than as the main driver of a stockpicking strategy.
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