Gemstar Intl (GMST) Message Board

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Technology Stocks : Gemstar Intl (GMST)

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To: BirdDog who wrote (1825)	2/8/2000 1:49:00 PM
From: RocketMan	Read Replies (1) of 6516

It simply appears to me that there are allot of institutional investors who have too much of the great stocks...As a result...Anything that attracts their attention is causing them to sell...Because they need to sell and balance their portfolios. That is an interesting observation and one that I tend to agree with. I have observed time and time again how my Vanguard funds (in which I have quit a bit of 401 money) downsize their holdings in the companies that are doing the best. By doing this they continue to underperform by a vast margin my taxable account, in which I buy and hold the winners, even if they fall back and regroup. I don't disagree with their way of doing business, since they can't take the same risks as I can as as individual investor. Also, there is a peer pressure among funds that keeps their returns within a certain band of their peers. If they underperform consistently, then they have a problem. But they also have a problem if they overperform consistently, because they are then accused of being too risky. So they remain within conservative bounds, and buy and sell stocks as needed to remain within those bounds. I am not saying this is what is happening with Gemstar, but it well could be.

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