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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Major Tom who wrote (24060)	8/12/1998 1:01:00 PM
From: Follies	Read Replies (1) \| Respond to of 94695

funds have lines of credit that allow them to do distributions short term without selling stock

To: Major Tom who wrote (24060)	8/12/1998 1:23:00 PM
From: P.T.Burnem	Respond to of 94695

Question: If we had a market catastrophy and say massive amounts of people on a given day called up there mutual fund companies and told them to sell. The MF's would borrow to meet redemptions rather then sell. That said, IMO the theory of a prolonged bear market triggered by MF redemptions does not hold water simply because the majority of retail investors tend to sell near the bottom. PTB

To: Major Tom who wrote (24060)	8/12/1998 1:40:00 PM
From: James F. Hopkins	Read Replies (1) \| Respond to of 94695

Tom; You have to have Mutual fund orders in by the 2:15 cut off every day..by 2:30 they see what they have to do if there are a lot of people getting out. Timing on a Mutual fund is tricky as you really need to be ahead of the curve, if you jump out on "a day they have real big redemption's across the board," you will see a late sell off in the market and their Navs will fall. Most of them have enough cash to handle normal redemption amounts with out selling off stocks they don't want to. Also many of them now have lines of credit with banks to borrow if need be. They also have a way of using a fudge factor you will not get them to talk about. ( most of them ). When large inflows come in their Navs will pop up a tad, if more outflow than inflow, the Nav will dip a tad. You can be tracking the same stocks they hold, and see that the Nav don't always match the exact percentage move of the closing price of the holdings. My best guess is they have a small window of close out time in the afternoon that they can use under the need to expedite the posting of the Nav and in that window they can cut off certain issues to twik it one way or the other just a tad without getting in any trouble. As it's a very small amount, but can enhance their performance over time, it will balance out down the road for the longer term investor, and I can't blame them for nipping a bit off the market timers. Jim