TO ALL > Andrew Vance and Market Psychology 101
I've been thinking this ever since I read Andy's post on Wednesday. Andrew's published portfolio looks very much like a typical high tech mutual fund 'folio, only more specialized toward semis. This in mind, his statement about wanting to rotate out of the top 40% high performers and into the laggers is precisely what almost every fund manager in the world is thinking and doing this very minute.
It's the middle of the quarter, so there is no pressure to own high fliers, well known companies have been sky-rocketing on good earnings expectations, and smaller companies that disappointed last year haven't participated in the huge January bull--yet.
This is all the fund managers need to know to make them start locking in profits on the Applied Materials' of the market, and start pouring money into the Ultratech Steppers and Vishey's of the market, who have the most upside potential upon release of earnings reports.
This is why small caps usually rise late in the bull market cycle. Investors trying to uncover the next high flyer. To me, Andrew's intents are indicative of the market at large, and means that as the markets begin to churn out of the January winners, it will be churning into the smaller stocks for phenomenal gains.
The small caps will start to lead the market now.
KH |
