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Politics : Ask Michael Burke

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To: DJessen33 who wrote (67579)9/13/1999 11:23:00 AM
From: Knighty Tin   of 132070
 
Dj, The folks who are buying the same 100 stocks are doing so on margin. When their Dell is at $17, they will get a margin call and may have to sell the good stuff they inherited from somebody smarter. And the funds will get major redemptions. Since so many are indexed, they will have to sell a pro-rata share of everything. Other funds have an "income" component to their scammed returns, so they won't be able to sell big losers, as that would kill cap gain distributions. So they will have to sell what has held up, which will eventually take down the strong sisters as well as the weak. And, of course, movement in the big names will scare neophyte investors out of everything.
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