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Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 106.93+2.1%Dec 10 3:59 PM EST

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To: SgtPepper who wrote (46188)6/27/2000 3:18:00 PM
From: GVTucker  Read Replies (1) of 93625
 
SgtPepper, RE: Because their trading desk shorts the mutual fund holdings starting in April, when the fund managers say that new inflows have dried up. Of course, the fund managers could have held back some cash during the first qtr, but then the trading desk wouldn't get a good price when they sold.

How do you know that this occurs?

My experience is that Wall St. trading firms position very few stocks on the long or the short side. They'd rather not take the risk. It is pretty boring compared to your theory, but then, Wall St. is a lot more boring place than most people imagine.

edit: If your scenario was accurate, the mutual funds would indeed perform poorly, but the ROE of the Wall St. firms themselves would be very high. That is not the case.
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