Ross Givens, Senior Market Analyst for Traders Agency, was recently interviewed by Benzinga.
Traders Agency is a financial and trading platform led by Mr. Givens, a former VP of a major investment bank. Mr. Givens is considered by some to be the foremost authority on insider trading. He has developed a proprietary system that focuses on identifying high-probability investment opportunities by using transactions involving business insiders, like the CEO of a company.
Traders Agency is a financial and trading platform led by Mr. Givens, a former VP of a major investment bank. Mr. Givens is considered by some to be the foremost authority on insider trading. He has developed a proprietary system that focuses on identifying high-probability investment opportunities by using transactions involving business insiders, like the CEO of a company.
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NewsTranscript
00:00Welcome Benzinga Nation, today I've got a special guest with me, his name is Ross Givens
00:06and now Ross is a former money manager and also the vice president at JPMorgan Chase,
00:12but we're not here to talk about the traditional investment methods because since 2017 he's
00:17been using a different approach, right, he tracks insider trading activities to find
00:21stocks that are likely to make the bigger moves and from what I understand from the
00:25notes that have been given it seems to be working, right, the trading alert service
00:28which is called Insider Effect hasn't had a losing year, the compounded return over
00:33the last six years is approximately 2,000% which is great to see as well, now the beautiful
00:39part about it is that in 2020 we all saw the bear market but this strategy was still able
00:44to go ahead and turn a profit, enough from me, Ross welcome to the show man, looking
00:48forward to your insights.
00:49Hey man, thanks for having me.
00:51Now insider trading, whenever someone hears that they get kind of alerts like whoa, illegal,
00:57but give me the big picture overview of what your trading strategy is so folks don't go
01:01running away.
01:03Well first of all it is 100% legal, alright, the tips we're getting come from the SEC website,
01:09I don't think it gets any more legal than that, but insider trading is simply a term
01:16meaning trading by insiders, so anytime the CEO, the CFO, a board member, a vice president
01:21buys or sells their company stock, that is technically an insider trade.
01:26Now insider trading is a bad name for when it's done illegally, meaning trading on material
01:33non-public information, so you're a pharmaceutical company, you're about to get FDA approval,
01:39nobody knows it yet, you load up on the stock the night before the news and make a fortune,
01:44but that's insider trading in a jest, but what we're doing is analyzing all the trades
01:50by these insiders to look for these opportunities where it's just very obvious that they seem
01:56to know something, they're all buying totally out of the blue for the first time in years,
02:00so that's kind of what we're looking for without getting too specific.
02:04Now the SEC I know has guidelines, we've all kind of heard of Nancy Pelosi, there's so
02:08much scrutiny that goes out there in that sense as well, but what you're looking for
02:12is not the scheduled buying and selling, say for tax purposes or something that was planned
02:17maybe six months ago, you're looking for like the unusual activity, if you will, when
02:21it comes to insiders buying.
02:23Yeah, we're playing what is essentially a loophole, you know, a few years back and this
02:27used to be a big problem in the 80s and 90s, right, so the SEC, they passed a rule called
02:31the 10B5-1 rule, and essentially what that says is, listen, if you're an insider, as
02:37long as you've got a written plan for when you're going to buy, when you're going to
02:41sell, you're good, report it, you're immune from insider trading violations.
02:46The problem is, this rule is laughably vague, okay, so this plan can be anything, they can
02:53even make it their own proprietary formula, they're even allowed to change the plan to
02:58modify it throughout the year, so in a lot of ways, it is still kind of free for all
03:05when it comes to insider trading.
03:07Now when it comes to the insider trading aspect of it, are you just looking at like the say
03:11the CEO, or are you focused on a specific title within the organization because you
03:16feel like they might have more insights, like give me a little bit of...
03:19Yeah, well, we're looking at the top brass, so generally when it comes to insiders, it's
03:23the CEO, the CFO, the directors or board members, you know, various vice presidents, occasionally
03:29you've got the general counsel buying, and again, I'm just looking for what I call opportunistic
03:36buying, so as you mentioned, there are some routine schedules, tax purposes, where hey,
03:42look, the CEO put a million dollars in the stock, it's like, well, he put a million dollars
03:46in the stock at this time last year, year before, and year before, that's routine, you're
03:50not getting any information there, but on the other hand, if you got, you look, he's
03:54put a million dollars in, you go back, and like, well, he's been CEO for six years, he's
03:59never bought before, seems odd, he's suddenly going in, and then you dig in, and well, around
04:04the last two weeks, the CFO bought too, and so did the vice president, so did the general
04:09counsel, and so did three board members, and these guys rarely buy the stock, right?
04:13So when you see all of that, of course, it's no guarantee, but a lot of the times what's
04:18happening is they're trying to exploit some information they know that's gonna boost that
04:24stock price and make them a lot of money.
04:26Now I know you've got a webinar around this strategy coming up, which I'll talk about
04:30here in just a moment, but give me one or two winners, but I also wanna know a couple
04:34of losers as well, but we can start off with the good stuff.
04:37Yeah, well, the one that comes to mind most recently, and we only, by the way, we only
04:41put out three to five recommendations a month, we're not, you know, day trading this stuff,
04:45there's only so many just juicy opportunities, but one we did in January was this little
04:50biotech company called Perspective Therapeutics, the ticker is CATX, CATX, and this thing was
04:56like 40 cents a share, right, off the grid, nobody's watching it.
04:59Well, as I mentioned, it's a biotech company, but we looked into it and they were like right
05:03near the end of some stage two clinical trials, and as you know, those things go good, boom,
05:08to the moon, they go bad, it's not gonna be a fun week.
05:11Well, suddenly we saw in a single week, two board members, the chief financial officer,
05:17the chief medical officer, all piling into this stock, totally out of nowhere, they bought
05:23more stock in those two weeks than insiders at this company have bought in the last 20
05:31years combined, so it just looked like they might know something, so we followed along,
05:37literally that's the extent of our research, and as expected, drug trials were good, the
05:42stock shot up, I think it went up 350% over the next four months.
05:47That's a big win, but now tell me about the losers, I'm sure they're not all home runs
05:49like that, so tell me about the bad ones.
05:51You're right, any strategy's gonna have some losers, but to be honest, we really have not
05:56seen any big losers, now, not that some of them didn't, we're only risking about 15%
06:02on these, we're not cowboys with it, but when you think about it, the entire strategy really
06:08brings down your risk, because what we are doing is, well, we're only picking from stocks
06:15that are seeing heavy insider buying, we're kind of fishing from a stocked pond, so when
06:19you think about it, you've got the CEO, the president, the vice president, the board members,
06:24et cetera, all buying, six, seven figures apiece, for the first time in years, out of
06:29nowhere, what are the odds they're gonna do that right before a terrible earnings report,
06:36right before some terrible piece of news, you know what I mean?
06:38So it's just rare, there are black swan events, there are bear markets that bring down everything,
06:43it's why we use stop losses, it's part of the game, but generally our losers are just
06:48stocks that either don't go anywhere, meaning maybe the buying was just coincidental, or
06:52some deal fell apart, or, you know, market brings them down, they go down 5, 10, 15%,
06:57we just kind of cut them loose and move on, but it's lower risk than other things I've seen.
07:03You know, I was gonna ask you two questions, one of them I think I kind of answered myself
07:06while thinking about it is, why don't hedge funds do this, right, and I think the answer
07:10there, and you tell me if I'm wrong, is that there are small caps, you buy a lot of money,
07:15or you buy a lot of shares with a lot of money, you're gonna kind of create some havoc from the
07:19SEC and it may not be the best bang for your buck in dealing with them.
07:22They'll move the price too.
07:23Yeah, you may not get the shares you want at the average price itself,
07:27but why doesn't everyone else do it?
07:29Well, I wish they did, and I do training events every couple of months to try to show people how
07:35to do this themselves, I call it the best kept secret on Wall Street, and I think it is,
07:39it's the biggest advantage people have, you know, most people aren't aware this loophole exists,
07:44they're not aware that insiders report these trades publicly, and they don't know where to
07:49find them, it's all free information, you can do it, so that's what we try to do, I hold these
07:54events, I've converted thousands of people to diehard insider traders, and we hope to convert
08:00thousands more to kind of level the playing field, because we know that at the top, there's,
08:04they always have an advantage, and we're trying to use that advantage for ourself, we're letting
08:08them feed us inside tips, and we have one coming up, in fact, this week, it's Thursday, June 27th,
08:17about an hour long, it's online, it is 100% free, but it's Thursday the 27th, 3 o'clock p.m.,
08:24anyone can attend, it's online, the only catch is, it caps at a thousand attendees,
08:31so the software we use, it's mini, so just be sure to register early, show up for that, and
08:38I'll show you everything. And as I was on the website, trying to sign up itself, it talked
08:43about how you would actually send the report, once you do go ahead and fill out the form, even if you
08:47missed it, because I'm sure we all have busy lives, but Ross, this was good, man, I
08:52appreciate your time. Absolutely, I appreciate it, hope to see you there on the 27th. We will talk
08:57soon and chat, if you're interested, don't forget, you can click the link in the description and also
09:01in the chat, which is www.insidertradingtruth.com to sign up for the free training from Ross, by
09:07the way, it is on Thursday, June 27th at 3 p.m., and as always, thank you for watching.