You have to remember that a key development in the stock market is the amount of money available for investing. Your theory about " The fund mangers, scared to death, just buy the big blue chips because they won't be fired for buying IBM and Coca Cola. And these people will dump it all, if somebody just says "interest rate hike" - and fast" is not entirely correct.
Gil was correct on his previous post, -#102 I believe. There is so much retirement $ being poured into pension plans and IRA's, that fund managers have to invest it fast. So tell me, if you have a fund receiving a large chunk of cash every week, do you sit on it, earn 3%, and get fired? No, you invest it. Where can you invest large chunks of cash fast without going over the 5% rule, 10% rule, or 25% rule that all funds live under? In big, large-cap stocks. There are hundreds of millions of shares of IBM, KO MO, CAT, MSFT, INTL, etc. It's easy to put excess money to work in these stocks.
In addition, look at many of the smaller-cap stocks that have moved since this summer's mini drop. Read-Rite, and Kulicke & Sofftle, as well as many others have had excellent runs. All the market averages are moving into record, or near record territory. The Dow happens to be the fastest mover because of the need for quick investment of cash.
These are my opinions, and this is in addition to the belief that there will be selected drops in the market, but at the same time, there will be stocks that continue to rise based upon positive fundementals.
Keep it simple, don't look at theories about what the Japanese are investing in, etc. Basic fundemental analysis, alond with basic technical studies, and keeping your eyes open around you, will get you on the right side almost every time.
Later.
Mark |
