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Big Guns Let off Some Ammo as the Stock Market Reaches New Highs

jpm wmt meta

Last week various heavy-weight pundits declared the sale of participations in their principal interests. Names include:

On Thursday we saw that James Dimon filled an insider trade report declaring the sale of 821,778 shares of $JPM. Dimon had announced his family would sell a total of 1 million shares already in October 2023. However, he seems to have waited a while, maybe he’s timed the market just right, maybe not.

On Feb. 23 the Walton Family through the Trust declared the sale of 13.5 million shares, and on Feb. 21 the sale of 5.85 million shares of $WMT over the past 3 months. That’s a value of around $1.15 billion at current prices.

Zuckerberg sold over 2.65 million shares of $META over the past 3 months, the 144 filing shows on Feb 23. On Feb 22 Zuckerberg also declared having sold 2.5 million shares. Altogether that makes a value of nearly $2.5 billion.

There was a lot of chatter on Friday and into the weekend, about the fact that so many business magnates all took on the same approach. Other names mentioned were Warren Buffet, Jeff Bezos, and Bill Gates.

In particular, Dimon’s one-day selling spree stood out. Not only did he sell a considerable portion of his JPM holdings, but he did it all on the same day. Of course, this led to conjecture about whether he was calling the market top. We’ll see.

Conjectures aside, this type of practice, of selling portions of your stock portfolio as the market rises, is fairly common portfolio management, known as rebalancing. To explain briefly, say you have a portfolio of 2 assets. Stocks and bonds.

You start your portfolio with $600 in stocks and $400 in bonds for a 60/410 ratio. Over the following period, say 1 year, stocks rise 30% and bonds remain unchanged. You now have an unbalance in your portfolio.

Cleary holding $900 in stocks and $400 in bonds no longer satisfies your 60/40 ratio. So, you would sell stocks and buy bonds until your portfolio is again at a ratio of 60/40, stocks/bonds. Looking at these investors’ activities from this perspective sheds a different light on the story that’s been circulating.

However, whether they are trying to time the market or simply trimming their portfolios you always have to do your own research. You need to assess your perspective and outlook to determine your actions.

The S&P 500 looks fairly bullish for now, with perhaps a chance of a retracement at some point. But the stock market seems to have gotten used to the idea of interest rates higher for longer and the economy is still expanding.

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Gino Bruno D'Alessio
Gino D’Alessio is a professional Forex trader with 20+ years of experience in the financial markets as a broker-dealer. Having worked in New York and London, Gino is regularly featured on Seeking Alpha. He completed the CAIA program in 2015, which also gave great insight into global macro factors. His main focus is FX majors, indices and commodities.
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