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To: StormRider who wrote (42700)	8/10/2002 7:07:02 PM
From: BWAC	Read Replies (1) \| Respond to of 53068

No idea what a mutual fund could be policy driven to do with OPM (Other Peoples Money)

To: StormRider who wrote (42700)	8/11/2002 7:50:07 AM
From: DanZ	Read Replies (1) \| Respond to of 53068

If there were such a rule, it would be imposed on each fund manager by their company and not an outside regulatory agency. The only "rule" that I know of is that the fund has to track the index. Investors that have their money in an S&P 500 index fund wouldn't be happy if the index went up 10.7% and the value of their investment only went up 6.3%. Since fund managers are paid to mimic the index, I don't think that they would take any chances and hold a stock that wasn't in the index. I could only see them doing this if they had a perfect hedge with options. Watch the volume on the close Tuesday. I'd be willing to bet that it is way above normal. The average is around 15 million shares. If the volume isn't way above normal, it probably means that the index funds are already out, and in that case, I'd step up my buying. I don't know the answer to your question about whether a stock that is removed from the S&P 500 is included in another index of smaller companies. To the best of my knowledge, the criteria for inclusion and exclusion in an index is not subjective. S&P and other indexes rank the companies based on market cap (and maybe other factors), and they are either in or out. The indexes probably have rules about how long the company has to trade at a certain market cap to avoid short term spikes and too high a turnover in the index. If PALM is included in a smaller index, funds based on that index would buy the stock. It looks like PALM is heading for the S&P 500 Small Cap index, but they won't be added immediately because S&P didn't issue a change notice to that effect when they said that PALM would be removed from the S&P 500. I would also venture to guess that more money is in S&P 500 funds than S&P Small Cap index funds, although buying from the latter would certainly help support the stock.