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Strategies & Market Trends : Waiting for the big Kahuna
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To: William H Huebl who wrote (13982)2/8/1998 9:38:00 PM
From: James F. Hopkins  Read Replies (1) of 94695
 
Hi Bill; Tis more than I can explain, it depends on how the fund
is set up, found in the prospectus. Some funds can margin up to
20%..and yes they have negitive cash when they do. And the
negitive is on the balance sheet ( at the bottom of the ones
I looked at ). Also these funds often have a line of credit,
with banks to cover redemptions in the event of a run, so
they will not have to sell stocks they want to hold during
thoes times. Last April had many of them borrowing money
as people bailed out. I think they cut back on margins some
after that <G>.
But yes they can if it's in their charter, go on margins,
short, borrow money and all those nice things. These are
agressive funds.
To see cash in them is sort of rare, and as of the first of the
year the ones I looked at all had cash, I assume most
of them still do. I was shocked to see KAUFX with 10% cash,
and SPEQX with 7%..take it from there.
Jim
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