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Hi Phsst,
Saturday, July 19, 2003, 9:38:44 AM, you wrote:
P> Top % of Avg Avg
P> # of Total BETA Institutional
P> Issues Vol Ownership
P> on List
P> 3 10%
P> 20 25% 1.76 68.23%
P> 100 48% 1.48 65.85%
P> 200 61% 1.41 68.19%
P> 300 69% 1.36 68.86%
P> 400 75% 1.34 66.71%
P> The top 400 issues traded a minimum of $50 million USD each.
Interesting statistics. The institutional ownership statistic might
be telling. Back in '98 and '99 I used to actively trade a stock
here called Softbank. It was one of the high tech high flyers, and
for some reason I could make money actively trading this stock. At
the time my account was with Nikko Securities, and the branch manager
at that branch was my broker. One day he told me that I was the only
retail person he knew that traded the stock, that it was mostly only
traded by institutions.
The stock went very high by early 2000, then imploded with the rest
of its ilk, losing well over 90 percent of its value. During this
implosion, the stock lost institutional sponsorship, and when the
price got low enough, it started to become a retail favorite. About
that time, I lost the ability to trade the stock profitably. It
changed from an "orderly" stock to one that was extremely volatile,
and worst of all, no pattern or characteristics to the volatility
that I could see or take advantage of. I haven't traded the stock in
well over 2 years now, and it continues on it's erratic way. I watch
it once in a great while on one of my axillary screens.
So what do we know from this? Well, we know that a stock *can* go
from very tradable to very difficult if not impossible to trade. But
perhaps we can also see that heavy institutional ownership and
trading may contribute greatly to orderliness, as difficult as that
is going to be to arrive at a universal definition of. Interesting
story of one stock, anyway.
By the way, those betas above are dead-on the average betas of the 5
stocks I routinely trade.
Best,
Yuki
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