P&S and STO Death Blow's Message Board

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Strategies & Market Trends : P&S and STO Death Blow's

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To: JRI who wrote (30200)	6/19/2003 10:08:25 AM
From: t2	Read Replies (2) of 30712

(dip buying...portfolio managing)...how do you explain sell-off in late March then? If you were up big as a portfolio manager here (for the year), why wouldn't you want to play it conservative until October, and then buy in again (historically, seasonally- much better odds at more up).. I do admit it is a tough call with this scenario vs. those desperate trying to chase performance for quarter-end...but we are talking June here (not Dec.) It is basically a call on a change in market trend. March selloff was probably due to the idea that we got the rally and now the selloff was expecting next. The other thing about porfolio managers is what are you going to buy if you sell stocks? Cash probably gets you less than inflation; bonds? who wants to take a chance that it is a bubble about to burst..you are better off taking your changes in the stock market that has been in a 3 year bear. What happens if China decides to allow currency rates to float? Bad for bonds in a big big way! Basically one has to "play" the odds and the odds are tilted in a big way with stocks. In addition, if fund managers were underinvested in March, no one would have faulted them..would be seen as a good tactic. However, now we seem to be seeing a huge sentiment shift and such poor performance is likely not going to be tolerated by funds holder as they had done earlier when the view was that all we had was a trading rally. June is semi-annual performance; I believe it is more significant than March or September quarter ends. fwiw, I think this thing overshoots most market strategist projections. A few months ago I was prediction about Dow9000 by summer..now Dow10000 looks certain (to me) by end of Dec..and maybe overshoots that by a big margin. (i am lumping balanced managers in along with equity only types in making my comments)

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