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Page last updated at 14:49 GMT, Saturday, 12 December 2009

Director share dealings

Some investors think that the way to make money is to follow not pundits or analysts but the activities of company directors. If you buy and sell shares in their company when they do, the theory goes, you will make money.

Of course, company directors can't act on inside information when they trade shares in their own firms. But they often do have knowledge that is legal to use - and new research shows they use it well.

Researchers at Exeter University have found that buying when directors buy can generate returns of up to 20% on top of what you would expect.

Money Box hears from one authors of the report Professor Alan Gregory. He says you have to first identify "value" and "glamour" stocks.

This item was first broadcast on Radio 4's Money Box on Saturday, 12 December 2009

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