<<Yesterday I mentioned that Fidelity was rumored to be buying Gateway
(GTW) "sloppy." It led me to do a little research and it turns out there are a
handful of tech stocks with deteriorating fundamentals, which I have been
harping about, that tend to be rather strong on down days. I am sure that this
is just a coincidence but: Microsoft (MSFT), Intel (INTC), Dell (DELL), Cisco
(CSCO), Yahoo (YHOO), IBM (IBM), Novellus (NVLS), Apple (AAPL), Xerox
(XRX), Micron (MU), Texas Instruments (TXN) and Gateway (GTW) all are
stocks that should be affected negatively by the trouble in the world. Yet they
seem to be impervious to bad news lately.
Low and behold, Fidelity is either the first or second largest shareholder. Now
they could be buying more of the stocks that they love the most, but it is
curious that these stocks behave suspiciously well going into the last couple
of days of the quarter. We discovered an even bigger coincidence about three
years ago that was written up in Grants, when Jeffrey Vinik was still the
portfolio manager of Magellan. Then there were some very strange
perturbations at the end of the month.
This may all be pure coincidence, but folks who have a lot of money with
Fidelity should beware: They may be getting great performance simply
because Fidelity is large enough to continue buying the same names. If so,
at some point when Fidelity can't continue to disregard the fundamentals or it
runs out of dough, it will be a disaster. Food for thought.
William A. Fleckenstein <fleckenstein@go2net.com>, special to StockSite. >> |
