Stock Attack -- A Complete Analysis Message Board

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Strategies & Market Trends : Stock Attack -- A Complete Analysis

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To: Judy who wrote (7302)	3/23/1998 11:11:00 PM
From: Robert Graham	of 42787

I understand the criteria is not cut and dry. But since this is the case, there must be ways to deal with this. All you need is a large inflow of money into particular industries and stocks to make a position play profitable, no matter what the specific reason is that would explain the institutions actions. Following large block trades in where the money is going is one way, but this would be a more reactive way than the perspective that this "big picture" can provide you. So to summarize what you have said, the institutions look for a promising fundamental outlook and a good story to go behind it with respect to the sector and its industries. In evaluating a sectors outlook, they have some risk vs reward measures that they use to evaluate one sector over another as a place for their money. I suspect this has to do with their comparative projected earnings outlooks. I also image this has to do with the timeliness of a sector realizing this projected earnings outlook. So it appears you formulate a story based on evolving technology and other business motivations which can be in itself cyclical in nature. I suspect analyst reports help here. But then don't the analyst reports come out after the fact with respect to the story the institutions follow? Then you look to see what sector is in the best position to realize their story, and most particularly the likelihood of leadership being able to follow through. Do you first wait for evidence through the leadership's fundamentals like an improving earnings picture? This would simplify this picture which you can easily find yourself second guessing. Do you then monitor these sectors and associated industry groups for the inflow of institutional money? I imagine institutions also have familiar and repeating stories, such as that of the oil industries when the price of oil starts to move up. Once you see a sector and particular industries show technical improvement through this inflow of institutional money, then I imagine you look to time your entry into specific stocks. Would these stocks indeed be considered the leaders of their respective industries? Is this where the institutions first place their money when they rotate sectors? Now once the institutions have ridden up key stocks in particular industries, what criteria would they use to exit? Would this be more of a technical nature, or fundamental in terms of an industry that has become overvalued? I imagine they would want to start selling when the stock is still demonstrating upward strength. Would their decision with respect to timing their exit also have to do with other industries that for fundamental reasons now have popped on their radar screen? I imagine the institution would be less likely to move their money into cash and bonds unless they see evidence of a market correction in the works which implies once again the technicals of the market. Thank you for your reply, Judy. Rambling discussions work for me. ;) Bob Graham

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