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Strategies & Market Trends : Free Float Trading/ Portfolio Development/ Index Stategies

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From: dvdw©12/1/2010 7:46:29 AM
of 3821
 
This article is nearly a first, because it actually attempts to use the concept of The Free Float in the context of its meaning.

Unfortunately, this author nor the piece really gets what the Free Float measures.

Owned shares are categorized by class of ownership. The ownership has to be distributed or properly characterized across all classes of owners, the combined totals of owners must be known, and combined may not exceed the legal issued and outstanding....when these facts are properly accounted for, a free market price can be achieved, improperly accounted for, price becomes only an artifact of prevailing systems intent.

By way of example, Shares held by Individual investors which represent the greatest % of all owners, are disconnect in the calculations about available stock, and yet it is from this pool by way of omitting these shares from tabulation, cancelling Market pricing. Market pricing has been subordinated to the favored metrics implied by derivative expansion of shares above the legal authorized and outstanding....

While the thread welcomes attention to the most important metric The Free Float represents, we will need to continue to educate those arriving, to what constraints, it implies.

bloomberg.com
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