On Wall St., Insiders vs. Investors?

In the stock market, demand is up and so is supply. Some analysts wonder if the suppliers know a lot more than the buyers about where stock prices are going.

Investors poured $12.1 billion into U.S. and international stock mutual funds in the three days ending Thursday, according to estimates from research firm TrimTabs.com in Santa Rosa, Calif.

That’s the largest three-day inflow since the firm began tracking mutual fund investments in 1994. In January, investors put $24 billion into stock funds, the biggest monthly total since last April, TrimTabs estimates.

Meanwhile, margin debt--the amount of money borrowed to buy shares--as a percentage of the market’s value also probably reached a record during the month, said TrimTabs President Charles Biderman.

At the same time, companies issued $22.5 billion of new stock in January, second only to November’s $34.5 billion, Biderman said.

And corporate officers and directors sold $7.7 billion of their personal stock holdings in December--the second-highest total on record.

“Companies can’t sell stock fast enough, and insiders can’t sell stock fast enough,” Biderman said. “Who do you think knows more about the future of their companies--corporate insiders or the guy who’s buying stock on margin?”

Biderman believes that technical trends point to a decline in the market soon. In his model portfolio, he’s selling borrowed stock-index futures contracts in a bet that the market will drop.

But some other investors say the news isn’t as bad as it seems.

“If one were cynical, you could say it sounds like a market top,” said Michelle Clayman, investment chief at New Amsterdam Partners. “There certainly seems to be a lot of impetus to get your initial public offering out of the chute while the getting is good.”

Still, “the market’s in OK shape,” Clayman said, noting the economy and corporate profits are growing and inflation remains low. Some analysts also say that the overall trend in corporate insiders’ stock purchases versus insider sales suggests a positive outlook.