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Strategies & Market Trends : Tech Stock Options

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To: joe smith who wrote (39155)4/12/1998 12:51:00 PM
From: Robert Graham  Read Replies (1) of 58727
 
The funds during the last market correction were flush in cash, both in terms of bonds and money markets. The market action in the stock market with respect to the bond market illustrates this. That is why you have the stock market decouple from the bond market during significant market corrections. Also my talks with a good newsletter writer which is subscribed to be allot of his friends who are fund managers had confirmed this for me.

So even though the cash position of funds have been decreasing over the years, the funds cannot afford to stay in the market during a significant correction. This goes without saying, because this is a good way to lose much of the gains that they have made during the previous bull run of the market. For that matter,over time IMO the funds have become more short term and even speculative in their approach to the market because of their need to perform, as was alluded to by your post.

Bob Graham
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