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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Petrol who wrote (138630)12/14/2001 8:23:42 AM
From: sylvester80  Read Replies (1) of 436258
 
So much for the myth of trillions on the sidelines eh? They are down to 4.8% cash. <gg>

US EQUITY FUND % CASH LIKELY PLUNGED TO 4.8% IN NOVEMBER.

The bulls say this is the start of a bull market. We cannot recall the last time a bull market started when equity funds had so little % cash on hand. Our guess is that at the end of November, US equity funds had just 4.8% cash, down from 5.2% at the bottom at the end of September 2001 and. the recent 5.1% low in August.

At the end of October 2001, US equity funds had $162 billion on hand, down from $212 billion at the end of October 2000. Our November flow estimate for US equity funds is just $11.7 billion. Given the rapid rise in stock prices during November, our assumption is that all that flow was invested. If so, and fund assets rose by 8.5% due to performance, than $162 billion divided by $3.37 trillion equals 4.80%.

At the end of 1994 cash levels were at 7.9% and at the end of the 1990 recession US equity funds had 11.5% of their assets in cash. Even recent shorter term trading bottoms saw US equity funds with higher cash levels than recently. At the end of September 1998 % cash at US equity funds had climbed to 5.8% from a 3.7% low at t he end of April 1998. At the April 1997 low, % cash was 5.9%.

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