Insider Buys Signal Outsized Gains—Are You Paying Attention?

The notion of insider “smart money” has been validated by the market. A study conducted by investment firm Tweedy Browne shows that combining large insider purchases with value investing indicators can deliver significant excess returns.

At the heart of this strategy is identifying opportunities where C-suite executives—CEOs, CFOs, and other senior management—purchase over $100,000 of their own company’s stock, and the stock itself is fundamentally undervalued.

In a study spanning more than 26 years, the firm found that buying the lowest-valued stocks that met these criteria and holding them for two years produced cumulative returns 25 percentage points higher than the broader market. If the company also repurchased shares before the insider buying, the outperformance rose to 36 percentage points.

To put this strategy into action, Tweedy Browne launched the Insider+Value ETF in December last year, implementing the same approach. Since inception, the fund has outperformed the S&P 500 by nearly 13 percentage points.

Speaking of insider actions, recent significant stock sales by Nvidia executives have raised some red flags. According to filings released by the SEC, CEO Jensen Huang sold 100,000 Nvidia shares on June 20 and 23, cashing out nearly $14.5 million. Huang plans to sell a total of 6 million shares this year, representing around $865 million at current prices.

Another Nvidia board member, Stevens Mark, sold 650,000 shares on June 18 for roughly $88 million. He also filed a plan to sell up to 4 million shares and has already offloaded over 2 million.

A. Brooke Seawell, who has served on Nvidia’s board since 1997, just sold $24 million worth of shares—his largest single sale ever, more than four times the size of his previous transactions.

Meanwhile, the U.S. dollar’s weakness typically favors risk assets. Historically, a 10% decline in the dollar index has led to strong 12-month returns across asset classes, with gold and emerging markets leading the way.

Fund managers are currently heavily underweight U.S. stocks, the dollar, and energy. Could a shift back to neutral exposure trigger new opportunities?

Global military spending as a share of GDP stands at 2.5%, a 60-year low. Rising geopolitical tensions could push that back up to the 3.4% historical average—good news for defense companies.

Turning to China: According to a survey by the Official Monetary and Financial Institutions Forum (OMFIF), central banks are increasingly considering the Renminbi as an alternative to the U.S. dollar. In the next 12–24 months, 13% of central banks plan to increase Renminbi holdings, making it the second most favored currency after the euro.

The survey polled 75 central banks managing a combined $5 trillion in assets.

Goldman Sachs reports that global active mutual funds are significantly underweight Chinese equities. Their current exposure is just 1.6%, far below the benchmark index weight of about 5%. Of the 496 global funds analyzed, 428 (or 86%) are underweight China, and 226 hold no Chinese stocks at all.

Goldman estimates that returning to neutral weighting could drive $44 billion (315 billion yuan) in inflows, with large-cap stocks benefiting most due to their liquidity and index representation.

Since early 2025, breakthroughs in China’s domestic AI models are reshaping the growth outlook for private enterprises. In Goldman’s defined AI supply chain, private firms account for 72% of total market cap.

Goldman forecasts that AI applications could contribute 2.5% to annual corporate earnings growth over the next decade and raise the fair value of Chinese equities by 15–20%.

Consumer spending in China is undergoing a long-term structural shift toward services. Over the past decade, the share of service consumption in urban residents’ total spending has risen from 40% to about 43%, while goods consumption has declined.

This structural shift is driven by two key forces:

1. On the supply side, export-driven manufacturing faces overcapacity, limiting price growth for goods.

2. On the demand side, consumers are moving from big-ticket durable goods (e.g., housing, cars) toward more personalized experiences like culture, entertainment, and travel.

Other charts worth watching:

OpenAI expects to generate $125 billion in revenue by 2029 (up from $4 billion in 2024 and $13 billion in 2025), driven by ChatGPT subscriptions, API access, task assistants, and new AI products.

The Fed now projects U.S. GDP growth of 1.4% by Q4 2025, down from 1.7%. Historically, when growth slows to this level, recessions tend to follow.

WARN notices—a leading indicator of layoffs—jumped to 25,950 in May, the highest since August 2023. The JOLTS “hire rate” is inversely correlated with WARN notices, and the latest figures confirm a cooling labor market.

NFIB survey data show small businesses are increasingly planning price hikes. Because small firms can’t absorb costs, tariffs may feed into inflation more easily.

However, the Atlanta Fed survey shows that inflation expectations resumed their downward trend after a brief uptick earlier this year.

The U.S. still has the highest policy rate among developed economies. Switzerland is back to 0% interest, while Japan has exited negative rates.

Iran has slipped from being the Middle East’s largest economy in 2000 to its lowest-ranking major economy today.

U.S. air travel—often an early indicator of economic inflection points—is in decline. TSA passenger throughput has turned negative YoY.

Even in developed countries like the U.S., a college degree remains valuable. While hiring demand is cooling, job postings for BA-required roles have fallen much less.

After egg prices spiked, bananas may be next: U.S. banana prices rose 3.3% MoM in May to a five-year high, as 10% tariffs on imports disrupted the long-stable pricing structure. Bananas can’t be stockpiled or grown domestically at scale, making them particularly tariff-sensitive.