|
PureBytes Links
Trading Reference Links
|
Hi Al,
Sunday, July 20, 2003, 9:25:05 AM, you wrote:
AV> That was a neat story, albeit anecdotal. Very interesting. I
AV> remember years ago, when I was interested in O'Neil's CANSLIM
AV> method of trading, that he used to recommend SOME institutional
AV> ownership, but not a huge amount. He favored (and still does, I
AV> think) lower cap stocks with huge growth potential. You seem to
AV> be saying the opposite: institutional ownership is good, and the
AV> more, the better. Am I interpreting you correctly? Doesn't a high
AV> degree of institutional ownership result in diminished
AV> volatility, to the point of being less tradeable since the stock
AV> moves ever so slowly? Apparently not, at least in your case with
AV> Softbank.
Thanks for the kind words Al. Not sure what I'm saying. ^^_^^ As I
mentioned in another post, I never have really been able to sort the
characteristics of "orderly" and "disorderly" stocks into anything I
could profit from. Too many overlapping traits I guess. But the one
thing I will go one record suggesting is that "orderly" stocks *tend*
to remain so, and vice versa. The Softbank case is an exception to
that of course, and I grope for an explanation. That was one
possible attempt at one, and probably not a great one.
I think a high degree of institutional ownership results in
diminished volatility at periods where the market has found a level
it's generally comfortable at. But of course when the institutions
are dumping or buying, you can then get just the kind of rather
sustained trending activity that everyone seems to like -- at least
everyone who knows how to play that kind of situation, which is a lot
of folks. So I would guess it's really a question of whether you
think a market is in transition, or rather static. If in transition,
I want the same stocks the big guys want, or I want to short what
they want to dump. If it's static, what works? (Not much, or at
least not much real well, sadly.) Maybe the best bet for trading in
a fairly flat market would be stocks that have high institutional
ownership, which might be likely to remain in some fairly well
defined channel that could be played. And I'd want stocks like that
with a beta greater than 1 probably, more likely in the 1.4 to 1.6
range. A hypothesis anyway, and the beta number is simply the range
of the ones that I trade successfully, and it may be a number that
has more meaning in Tokyo than in New York or elsewhere. (I think we
tend to be more volatile here on average, than in the US.) In any
case, nobody would be too interested in trading beta 1s in a flat
market I'd suppose.
The interesting thing to me regarding the US market is that it really
hasn't *really* flattened out for very long, something I'd like to
see before calling a new bull. Maybe from this point we'll see that,
as I think earnings need to catch up with prices, and maybe they'll
catch up just enough to keep a floor under this, but not fast enough
to lurch it higher for a while. It's also possible I'm just not
zooming out far enough to see the "flatness". The next 4 to 6 months
should be really interesting, as if the market isn't always
interesting anyway. ^^_^^
Just read the note by Phsst, and the beta question is very
interesting. Think about institutions for a minute -- especially all
the mutual funds out there with very heavy trading activity by the
managers. A lot of these folks are really anything but static
holders. They have the money to move large issues repeatedly back
and forth between certain ranges, and I'm sure that's exactly what
they do when the market isn't going anywhere. (As I said before, I
suspect them of gaming the market during trend outbreaks, as well, as
they seek to establish large positions at multiple price levels, with
minimum risk, something we'd all do if we could.) In fact, this is
about the only way they can make money when the market really
flattens out. I sure don't notice that their trading activity slows
in periods like that. I suspect this goes on all the time when
conditions are ripe, and one of the symptoms may be those volume
spikes we see all the time that turn out to not mean too much, the
ones that die after a single day or two and result only in a
relatively small price movement, one that only the casually observant
will get overly and incorrectly excited about. So we may be
suspecting the wrong thing when we equate institutional ownership
with sluggish price movement. Very interesting subject.
Yuki
------------------------ Yahoo! Groups Sponsor ---------------------~-->
Free shipping on all inkjet cartridge & refill kit orders to US & Canada. Low prices up to 80% off. We have your brand: HP, Epson, Lexmark & more.
http://www.c1tracking.com/l.asp?cid=5510
http://us.click.yahoo.com/GHXcIA/n.WGAA/ySSFAA/GHeqlB/TM
---------------------------------------------------------------------~->
Send BUG REPORTS to bugs@xxxxxxxxxxxxx
Send SUGGESTIONS to suggest@xxxxxxxxxxxxx
-----------------------------------------
Post AmiQuote-related messages ONLY to: amiquote@xxxxxxxxxxxxxxx
(Web page: http://groups.yahoo.com/group/amiquote/messages/)
--------------------------------------------
Check group FAQ at: http://groups.yahoo.com/group/amibroker/files/groupfaq.html
Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
|