[How Aggressive Institutional Investors Operate]
Eric: VERY good questions. First: I worked at Putnam Funds from 1970-1980 (SVP, Manager of Market Analysis Dept., Member of Investment Policy Committee), and have been consulting independently since then, working VERY closely with pension fund mgrs, mutual fund mgrs, etc. The comments below relate to how "they" do it generally, not to one specific money manager.
>>>If you are an institutional investor and heard an excellent sales pitch from a promising, company would you run back to your office and immediately buy, or would you try and dig up some unbiased facts on your own before you made the purchase? In your estimation. How long would this take?<<<
Before I heard the "pitch" I would have done some preliminary investigation, since there's not enough hours in the day to hear them all. The stock, for example, would have to match my investing style (a "value" manager wouldn't waste his or her time on Amati, for instance) and I would therefore have some "unbiased facts" already. Given this, I could buy the stock within a matter of minutes if I liked the "story". (Yes, "minutes"; I've seen it done many times -- often from the road.)
>>>While in the research phase of this company suppose you looked at the price trend and saw the company was on the bleed. Would you hold off on the investment, or say: "Hey. just a minute. I think we should keep an eye on this one until things stabilize a bit with the price. No sense in buying in now and watch it sink some more" ???<<<
Most fund managers are fundamentalists, not technicians. If they like a stock at a price, they'll buy it; if it goes down, they'll buy more.
>>>>>>I may accept your "The Boston trip WAS a failure" statements if I understood the decision and buying process of the institutional investor. Are you saying this only based only on the single fact that they have not made the investment???<<<
Yep. If they had liked the story they would have started buying the stock by now. If they had started buying the stock it wouldn't have hit a new low. It did, ergo they didn't. (At least not through yesterday; today MAY have been a different story, but you'll have to ask the tapewatchers that.)
>>>Please Walt.I need the education.<<<
Hope I've helped. If you want more info let me know and I'll do my best to try and oblige.
Respectfully,
Walt |
