Insider Trading, Institutional Ownership, and Trend‑Cycle Dynamics 2010–2025
1. Introduction Understanding how insiders (corporate executives, directors, major shareholders) and institutional investors (mutual funds, hedge funds, pension funds) behave across market cycles is central to explaining the anatomy of long‑term price trends. This report synthesizes the most relevant academic research from 1986–2024, focusing on: • insider buying/selling patterns • institutional accumulation/distribution • herding and feedback trading • trend‑phase behavior (early, mid, late) • predictive power for future returns 2. Insider Trading Behavior Across Market Cycles 2.1 Foundational Research Seyhun (1986–2014) H. Nejat Seyhun is the leading authority on insider trading research. Key findings across his body of work: • Insiders are contrarian. • They buy aggressively after large declines. • They sell heavily after strong rallies. • Net insider buying predicts positive 12‑month returns. • Net insider selling predicts negative 6–12 month returns. 2.2 I...