I regard those people as not appreciating the basics of creating and protecting wealth. Far more basic then even owning or trading shares is to diversify. And i type this to educate them, not you.
These directors get very heavy with their share rewards and its just crazyness for them to not sell some portion. Years ago it was seen as a lack of faith in the share price, like a macho stereotype of standing tall and showing faith. Today its seen as a very sensible wealth protection and risk mitigation strategy.
The recent forge group collapse shows how a allegedly seemingly healthy company can quickly get into strife. Even Roger Montgomeries "Skaffold" had it rated as and A2 company. ABCD represents the quality and safety of the company. Where as 12345 represents the performance of the company. It was rated as having the best "financials" on the asx. Yet it failed.
Normally companies get far more warning of a deterioration and many will still argue that FGE got shut down extremely prematurely by the bank. But it highlights exactly why directors must not allow all thier wealth, or even the majority of thier wealth to sit in one company. Its just a simple case of risk management. And personally it shows me that those directors understand risk management which is a good quality for our directors to display.
DLS Price at posting:
$1.65 Sentiment: LT Buy Disclosure: Not Held
