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Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: edward miller who wrote (1769)	9/24/1998 10:45:00 AM
From: Skeeter Bug	Respond to of 3339

from the article... >>Long-Term Capital has trading contracts based on securities worth nearly $1 trillion, an investment banker close to the talks estimated, and its agreements involve institutions scattered all over the world.<<

To: edward miller who wrote (1769)	9/24/1998 11:26:00 AM
From: Sword	Read Replies (2) \| Respond to of 3339

Hehe! One trillion is so large a number that I'm not used to writing it out. OK, let's try again: 1 Trillion = 1,000,000,000,000. Let's put it this way: if the fund truly has a portfolio that large as reported in the article (all hedged, of course) and they want to reduce it by 1/2 and if the average security in the portfolio was priced at $25 and they wanted to sell 100,000,000 (one hundred million) shares a day on the Dow, it would take 200 trading days or about 1 year to reduce the exposure that much. That means for just this one hedge fund reducing its exposure by 1/2 over a conservative 1 year period, they would make up about 15% of the trading activity on the Dow! Incredible! Of course, their investments are spread around the world in Danishs (har!) and the like. But this is just one fund. -Sword