The assassination attempt on Trump failed, but the Republican Convention succeeded in killing the Trump stock market rally. The week started on a positive note with almost a providential feel but began unraveling as market participants grappled with what a second-term Trump Presidency might really look like. Trump’s acceptance speech landed like a lead balloon on an increasingly nervous market. It didn’t help that Goldman Sachs said a 10% market correction might be underway. Israel struck targets in Yemen in retaliation for a lethal Houthi drone attack in Tel Aviv. Tensions escalated as the threat of a broader war in the Mideast and disarray in the White House continued to ratchet up. Israeli Prime Minister Netanyahu’s address to Congress next week will likely highlight a divided Democratic party versus a united Republican party, adding to the market’s perennial anxiety about one-party rule and the resulting lack of checks and balances. Another 24 hours, who knows?
Name: Walter W Bettinger
Position: Co-Chairman and CEO
Transaction Date: 2023-07-17 Shares Bought: 25,000 Average Price Paid: $66.26 Cost: $1,656,500
Company: Schwab Charles Corp (SCHW)
Name: Richard A Wurster
Position: President
Transaction Date: 2023-07-17 Shares Bought: 10,000 Average Price Paid: $62.05 Cost: $620,454
Company: Schwab Charles Corp (SCHW)
Schwab Charles Corporation was founded in 1971 in Westlake, Texas. The Charles Schwab Corporation, along with its subsidiaries, is a savings and loan holding company that offers wealth management, securities brokerage, banking, asset management, custody, and financial advising services in the United States and abroad. The organization is divided into two business segments: Investor Services and Advisor Services. They provide brokerage accounts with equity and fixed income trading, margin lending, options trading, futures, and forex trading, and cash management capabilities, including certificates of deposit; third-party mutual funds through the Mutual Fund Marketplace and Mutual Fund OneSource service, as well as mutual fund trading and clearing services to broker-dealers; exchange-traded funds; advisory solutions for managed portfolios, separately managed accounts, and customized portfolios.
Mr. Bettinger has been the company’s Chief Executive Officer and board member since 2008. He has been Co-Chairman since 2022 and the company’s President from 2008 to 2021. He is also the Co-Chairman of Charles Schwab Bank, SSB, and a trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Laudus Trust, and Schwab Strategic Trust, all of which are registered investment companies administered by the company’s affiliate. He was also the Chief Operating Officer from 2007 to 2008, the Executive Vice President and President of Schwab Investor Services from 2005 to 2007, the Executive Vice President and Chief Operating Officer of Individual Investor Enterprise from 2004 to 2005, the Executive Vice President and President of Corporate Services from 2002 to 2004, and the Executive Vice President and President of Retirement Plan Services from 2000 to 2002. Mr. Bettinger, the company’s Chief Executive Officer, collaborates closely with the board to evaluate and strengthen the company’s strategic position.
Richard A (Rick) Wurster has been President of The Charles Schwab Corporation since 2021. Wurster’s responsibilities include Schwab’s client enterprises, wealth and asset management, banking and trust services, technology, and operations. He also chairs Schwab CharitableTM and is President and Chairman of the Charles Schwab Foundation. Before his present position, he was the head of Schwab Asset Management Solutions, where he oversaw money management and portfolio advising solutions, wealth management services, financial research, and market intelligence. Before joining Schwab in early 2016, Wurster had leadership positions at Wellington Management and McKinsey & Company, where he led the asset management business and was an Associate Principal. Wurster holds a Master of Business Administration from Dartmouth College’s Tuck School of Business, as well as a Bachelor of Science in economics from Villanova University, where he graduated with honors and served as golf team captain. He has both the Chartered Financial Analyst® and the Chartered Market Technician® credentials. He also serves on First Tee’s Board of Governors.
Opinion: I’ve been in this game a long time, and as far back as I can remember, the dream of a one-stop financial center has transfixed the marketing departments of financial institutions and their management with this stupefied glare. I don’t know if anyone ever thoroughly vetted the client. Did they ask him/her if they wanted a one-stop shop? I, for one, have chosen the best-of-breed approach, using one for brokerage, banking, loans,etc.; you get the picture.
It seems like Schwab is retreating some from this approach. Last Tuesday, Schwab reported lackluster earnings second quarter results and “vowed to shrink itself over time as it believes a “somewhat smaller” bank will help meet clients’ banking needs, lower its capital intensity, and protect the economics it is able to generate from owning a bank.” In other words, we fucked up and are going back to our roots.
- The question investors must ask themselves is whether their core brokerage and advisor custodian model is strong enough. I know that as an investment advisor, the last thing you want to do, though, is ask your clients to move to another brokerage firm, inundating them with an avalanche of new forms and customers’ questions about this and that. So, inertia is the motivating force unless the experience is so egregious that you just can’t stand it.
- The stock has sold off a lot, and there has been significant insider buying. Their Reddit reviews are underwhelming, though, Barron’s gives them 4.5 stars, only behind Fidelity’s 5 stars. I think I’d try a trade, not move my account.
Name: Willie CW Chiang
Position: Director
Transaction Date: 2023-07-12 Shares Bought: 10,000 Average Price Paid: $43.90 Cost: $438,967
Company: Delta Air Lines Inc. (DAL)
Delta Air Lines, Inc. was established in 1924 and is headquartered in Atlanta, Georgia. Delta Air Lines, Inc. operates scheduled air transportation for passengers and goods in the United States and abroad. The corporation has two business segments: airline and refinery. Its domestic network included core hubs in Atlanta, Minneapolis-St. Paul, Detroit, and Salt Lake City, as well as coastal hub positions in Boston, Los Angeles, New York-LaGuardia, New York-JFK, and Seattle; its international network included hubs and market presence in Amsterdam, Bogota, Lima, Mexico City, London-Heathrow, Paris-Charles de Gaulle, Sao Paulo, Seoul-Incheon, and Tokyo. The company sells tickets through various distribution channels, including delta.com and the Fly Delta app; serves as reservations specialists; and manages both online travel and traditional brick-and-mortar locations. They also provides third-party customers with aircraft maintenance and engineering support, repair, and overhaul services, and vacation packages.
Willie Chiang joined Delta Air Lines Inc.’s board of directors on April 26, 2024. Mr. Chiang has been the Chief Executive Officer of PAA and PAGP since October 2018. He has also served as Chairman since January 2020 and a director of PAA and PAGP since February 2017. He previously held the positions of Executive Vice President and Chief Operating Officer of PAA and PAGP from January 2018 to October 2018, as well as Executive Vice President and Chief Operating Officer for the company’s U.S. operating and commercial activities from August 2015 to December 2017. He joined PAA and PAGP in 2015 after previously serving as Executive Vice President of Operations at Occidental Petroleum Corporation from 2012 to 2015. From 1996 to 2012, he held several positions at ConocoPhillips and its predecessors. Mr. Chiang began his career in refining with Chevron in 1981. He has a bachelor’s degree in mechanical engineering from the South Dakota School of Mines and Technology. He has completed the Advanced Management Program at the University of Pennsylvania’s Wharton School of Business.
Opinion: Just when you think the news around airline travel and profits can’t get much worse, the largest IT failure in history grounds and delays thousands of flights, angering customers around the world. This has to be a climax of bad news. In other words, it’s a short-term buying opportunity.
Name: Kenneth Duane Seipel
Position: Interim CEO
Transaction Date: 2023-07-10 Shares Bought: 282,644 Average Price Paid: $19.03 Cost: $5,377,822
Company: Citi Trends Inc (CTRN)
Citi Trends, Inc. was founded in 1946 and is based in Savannah, Georgia. Citi Trends, Inc. is a value retailer of stylish garments, accessories, and home items. The company sells fashion sportswear and footwear for men and women, as well as clothing for children, including newborns, babies, toddlers, boys, and girls; sleepwear, lingerie, and scrubs for women; and children’s uniforms and accessories. They also sell accessories and beauty products such as handbags, luggage, hats, belts, sunglasses, jewelry, and watches, as well as clothing for both men and women. In addition, the company sells home and leisure products such as bedrooms, bathrooms, kitchens, and decorative accessories, as well as food, technology, team sports, health and wellness products, seasonal things, books, and toys. Citi Trends, Inc. primarily markets its products to African American and multicultural families in the United States. The company was previously known as Allied Fashion, Inc., but changed its name to Citi Trends, Inc. in 2001.
Mr. Kenneth Duane Seipel has been appointed Interim Chief Executive Officer and Director of Citi Trends Inc., from June 2, 2024. Mr. Seipel served as an independent director of Citi Trends, Inc. from September 30, 2019, until June 2, 2024. Mr. Kenneth Duane Seipel, generally known as Ken, has served as Lead Independent Director of West Marine, Inc. since August 23, 2021. He has been the CEO of West Marine, Inc. since January 2019, previously serving from 2013 to 2017. Mr. Seipel served as Chief Executive Officer of Gabriel Brothers, Inc. from March 2013 until March 2017. From March 28, 2011, to February 1, 2013, he was President and Chief Operating Officer at The Wet Seal, Inc. He has been Wet Seal Inc.’s Co-Principal Executive Officer since July 20, 2012. He has years of retail business expertise and has held several merchandising and operations management positions at Target Corporation, Shopko Stores, Inc., and J. C. Penney Company, Inc. He received his Bachelor of Arts from the University of Wisconsin-Green Bay.
Opinion: It’s possible I worked at a predecessor company when I was in high school in Savannah, Ga. This is a massive insider buy, and I’m at a loss. Why? You’re the interim CEO, so can you pull back the trigger and load up? Sure, the stock is depressed, and the business sucks but its debt free and trading at book value.
Name: Liberty 77 Capital L.P. / Liberty 77 Fund International L.P. / STM Partners LLC / Steven T Mnuchin
Position: 10% Owner
Transaction Date: 2024-07-09 Shares Bought: 1,129,609 Average Price Paid: $8.81 Cost: $9,956,487
Company: Lions Gate Entertainment Corp (LGF-B)
Lions Gate Entertainment Corporation was created in 1986 and is headquartered in Santa Monica, California. Lions Gate Entertainment Corp. operates in the film, television, subscription, and location-based entertainment industries in the United States, Canada, and worldwide. The corporation is structured into three business units: motion pictures, television production, and media networks. The Motion Picture business develops and produces feature films, acquires North American and global distribution rights, distributes North American feature films in theaters, home entertainment, and television, and licenses global distribution rights. Television Production creates, produces, and distributes series, movies, miniseries, and nonfiction content worldwide. Media Networks distributes STARZ-branded premium subscription video services locally and internationally through over-the-top platforms and video programming distributors such as cable operators, satellite TV providers, and telecommunications companies.
Liberty 77 Capital L.P., doing business as Liberty Strategic Capital, is a private equity firm. The company mostly invests in technological firms. Liberty Strategic Capital services consumers throughout the state of Washington. Steven T. Mnuchin, former Secretary of the Treasury, leads the firm, which was created in 2021.
Liberty 77 Fund International LP engages in the Financial Services sector. The company is headquartered in Washington, D.C.
STM Partners LLC, a Delaware limited liability entity, has indirect authority over the Liberty Manager and the Liberty Funds’ general partner. Steven T. Mnuchin is the President of STM Partners LLC.
Steven T. Mnuchin is Liberty Strategic Capital’s Founder and Managing Partner, as well as the firm’s Investment Committee Chair. Mr. Mnuchin formerly served as the 77th Secretary of the Treasury, from February 2017 to January 2021. Mr. Mnuchin was in charge of directing the US Treasury, whose objective is to preserve a strong economy, encourage economic growth, and generate job opportunities by creating conditions conducive to success both at home and abroad. Mr. Mnuchin was also responsible for cybersecurity for the financial services industry and all Treasury divisions, including the IRS. Before his confirmation, he was the Founder, Chairman, and CEO of Dune Capital Management. He formed OneWest Bank Group LLC and served as Chairman and CEO until it was sold to CIT Group Inc. Secretary Mnuchin previously worked at The Goldman Sachs Group, Inc., where he was a Partner and Chief Information Officer, overseeing the firm’s global information and technology strategy and operations. Secretary Mnuchin got a bachelor’s degree from Yale University.
Opinion: Steven Mnuchin was involved in producing or financing a significant number of movies, particularly through his film production company, Dune Entertainment, immediately prior to running Trump’s 2016 election fundraising efforts. He’s repeatedly expressed an interest in buying TikTok, but that may be a bridge too far for even him. I say he buys Lion’s Gate as his consolation prize.
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You can be an insider, too– by clicking here
Insiders sell the stock for many reasons, but they generally buy for just one – to make money. You’ve always heard the best information is inside information. Everyone with any stock market experience pays close attention to what insiders are doing. After all, who knows a business better than the people running it? Officers, directors, and 10% owners are required to inform the public through a Form 4 Filing of any transaction, buy, sell, exercise, or any other within 48 hours of doing so. This info is available for free from the SEC’s Web site, Edgar, although we subscribe to SECForm4 as they provide a way to manage and make sense of the vast realms of data. I’ve tried a lot of vendors. SECForm4 is one of the smaller ones, but I like supporting Frank. He is not arrogant. He’s helpful and has great prices. He also trades on his own data, so I like people that eat what they kill.
The bar is different from selling because the natural state of management is to be a seller. This is because most companies provide significant amounts of management compensation packages as stock and options. Therefore, we analyze unusual patterns with selling, such as insiders selling 25 percent or more of their holdings or multiple insiders selling near 52-week lows. Another red flag is large planned sale programs that start without warning. Unfortunately, the public information disclosure requirements about these programs, referred to as Rule 10b5-1, are horrendously poor. Also, planned sales that pop up out of nowhere are basically sales and are seeking cover under this corporate welfare loophole. I also generally ignore 10 percent shareholders as they tend to be OPM (other people’s money) and perhaps not the smart money on which we are trying to read the tea leaves. I say generally because some 10% shareholders are great investors. Think Warren Buffett and others
Of course, insiders can also be wrong about their Company’s prospects. Don’t let anyone fool you into believing they never make mistakes. Do your own analysis. They can easily be wrong, and in many cases, maybe most cases, have no more idea what the future may hold than you or me. In short, you can lose money following them. We have, and we curse aloud; what were they thinking!
We like Fly on the Wall for keeping up with what events might be happening, analysts’ comments, and whatever else could be moving the stock. Dow Jones news service is an essential tool, but many services pick up their feed like they do Bloomberg. For quick financial analysis, it’s hard to beat Old School Value.
A big callout to my assistant Ambreen who sets up this conversation by listing the notable buys that I’ve identified. She probes the 10k for a reasonable description of the business. I’ve found that to be the most accurate and succinct place to find out what a business actually does.
This blog is solely for educational purposes and the author’s own amusement. Think of the blog as part of my personal investment journal that I am willing to share with the DIY investor. There are also many parts that I am not willing to share if I think it could influence trading action or be detrimental to the Fund’s partners. We could be long, short, or have no position at all in any of the stocks mentioned and express no written or implied obligation to disclose any of that.
The Insiders Fund is for qualified investors and by Prospectus only. Nothing herein should be construed otherwise. THE INSIDERS FUND prefers to invest in companies at or near prices that management has been willing to invest significant amounts of their own money in, but we have no requirement to do so. We also invest in many companies in anticipation of future insider buying or with the expectation that there is none at all.
You can be an insider, too– by clicking here
Prosperous Trading,
