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To: smolejv@gmx.net who wrote (111555)	7/7/2001 2:30:03 PM
From: James F. Hopkins	Read Replies (1) \| Respond to of 436258

DJ; I know I was a bit extreme with the fund thingy, there are a few funds that are not crooked and can show positive results "most of the time" in respect to their actual cash flow. But if the truth were really known 80% of the mutual funds would be shut down. 1 they show an expense ratio that's based on their assets, not on their cash flow. 2 The majority of funds that have increasing Navs take in almost twice as much money as they pay out , and by that I mean that even as their Navs go up , the Total asset gains are are just about 1/2 of the money that went in. In other words the expense ratio based on Assets is the big smoke screen; as if expense were based on cash flow then they would be seen as one of the biggest money losing scams going. There are very few exceptions. ------------------ The Mutual fund racket was a windfall for some of the slickest crooks our society has made. The hot shot hedge funds rip off millionaires left and right, But on paper they show huge gains..it suckers that get took to the cleaners seldom ever complain as they( 1) don't want to look stupid or (2) are actually convinced it was their fault for selling out at just the wrong moment. ------------------- These fund managers have lines of credit ( supposedly to handle large redemption without having to sell stocks) even the ones who supposedly don't buy stocks on margin have a short term credit set up to where they can circumvent that no margin crap. They see the flow coming in or going out and that line of credit is really used to buy a dog shit of extra stock on days they have strong inflow hence you often see late day rallies when money is moving into funds, the suckers buying in are paying a premium ..when outflow hits they sell the doggy poop out of every thing not only to make the redemption's but to pay off that line of credit, so the suckers getting out wind up getting shafted with the closing Nav..most often when big redemption days hit you will see stocks closing down late in the day. What all this does is let the fund manger look much better on paper he was buying stocks cheaper than most of his clients when he saw the big orders coming in, then selling them higher when he saw the redemption orders hit he made the spread between the stock prices and his closing nav , over time this adds up to big money and makes him look a lot better than he really is. That's why I often lock in my price with the qqqs or spy if I think the end of day price is going to skew against me. ( I hate to buy a fund on a strong up day and pay 3 to 5% more than I would have had I bought it early , like wise I don't want to exit a fund on a strong down day and get 3 to 5% less than if I go out early. I don't always get it right , but even when I am wrong I at least got the midday price of what I thought was the high or low as long ( as I'm playing the index itself.) There is some extra cost to me that way however I'v been doing it enough that I get it right over 80% of the time and that more than pays for my swaps. ----------------- Any way what I'm saying is when you see those volatile days up/or down late in the day you know the funds just Skimmed off the suckers going in or out, they don't trade most stocks until they see which way their cash flow is going to go. Rule of thumb says late day rallies have money flowing into funds, late day sell offs happen on big redemption days. Right now the S&P still looks just a tad overbought and the NDX a tad over sold Jim