Derivatives: Darth Vader's Revenge Message Board

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Non-Tech : Derivatives: Darth Vader's Revenge

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To: Worswick who wrote (610)	10/28/1998 5:13:00 PM
From: robnhood	Read Replies (2) of 2794

<<<<Date: Wed Oct 28 1998 16:39 Boardreader (THE ULTIMATE DERIVATIVE ....) ID#20767: Copyright © 1998 Boardreader/Kitco Inc. All rights reserved The ultimate derivative is the mutual fund. The value of most, if not all, mutual funds is NAV ( net asset value ) . This figure is derived daily, if not more often, from underlying assets. The reason that MFs are the 'ultimate' derivative is that they are self-directed! Because 'momentum investing' is the primary characteristic of current market investing, the high prices charged for most securities is due to bidding wars between the 5000+ mutual funds. These bidding wars have been fueled, in great measure, by the captured liquidity available through 401Ks, pension plans, IRAs, etc. One reason that Alan Greenspan may have loosened the official credit spigot is to allow MFs an external source of redemption funding in the face of declining fundamental valuations. I believe that this is AGs primary motivation. If so, the crash to come is incomprehensible to all who think in terms of yesterday. >>>>

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