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Very insightful Yuki... Thank you.
But in retrospect, was the plight of Softbank so different from our
Enron or WorldCom or HealthSouth?
I am guessing, but was Softbank one of the many 'bubble stocks' of the
dot.com era which quickly collapsed in early 2000?
And yet Enron, WorldCom, HealthSouth and so many others collapsed last
year because of deceptive accounting practices... and yet they had
enormous Institutional sponsorship, eh?
I treat Institutional ownership as a stabilizing factor, but I never
really trust them because they are like the rest of us... to one
degree or another they are blind trend followers who often times don't
use their noggins (or noses) to ferret out potentially bad situations.
Institutional ownership is just one piece of a thousand piece puzzle
that we must consider.
Regards,
Phsst
--- In amibroker@xxxxxxxxxxxxxxx, Yuki Taga <yukitaga@xxxx> wrote:
> 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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