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Strategies & Market Trends : Waiting for the big Kahuna
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To: Major Tom who wrote (24060)8/12/1998 1:40:00 PM
From: James F. Hopkins  Read Replies (1) of 94695
 
Tom; You have to have Mutual fund orders in by the 2:15 cut off
every day..by 2:30 they see what they have to do if there are a
lot of people getting out. Timing on a Mutual fund is tricky as
you really need to be ahead of the curve, if you jump out on
"a day they have real big redemption's across the board," you will
see a late sell off in the market and their Navs
will fall. Most of them have enough cash to handle normal
redemption amounts with out selling off stocks they don't
want to. Also many of them now have lines of credit
with banks to borrow if need be.

They also have a way of using a fudge factor you will
not get them to talk about. ( most of them ).
When large inflows come in their Navs will pop up a tad, if more
outflow than inflow, the Nav will dip a tad. You can be tracking
the same stocks they hold, and see that the Nav don't always
match the exact percentage move of the closing price of the
holdings. My best guess is they have a small window of close
out time in the afternoon that they can use under the need
to expedite the posting of the Nav and in that window
they can cut off certain issues to twik it one way or the
other just a tad without getting in any trouble. As it's
a very small amount, but can enhance their performance over
time, it will balance out down the road for the longer term
investor, and I can't blame them for nipping a bit off the
market timers.
Jim
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