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Most mutual funds probably can't do that because they have so much money.
It's costly for them to move huge amounts of money in and out of stocks. If
it's a large stock they have a position in, it's usually a large position
making it very expensive because of the number of shares. If it's a small
stock, even a modest position can move the stock as they try to jump in and
out.
I have become a huge fan of Kevin Landis of the First Hand Funds. The First
Hand funds were founded on the principle of hiring fund managers who are
experts in the field of the fund they manage and they go out and use their
expertise to look for trends and try to get in front of them. Every time
Landis is on CNBC he names 1 or 2 small companies that no one has ever heard
of that he is buying into because he thinks they will be in an important
space in 4 or 5 years. He's got an impressive track record even in this
raging bull market.
What you are looking for is a hedge fund. They are smaller (usually) and
can move around more nimbly. But then of course you're usually betting on 1
or 2 guy's ability to dance on the tape.
Kent
-----Original Message-----
From: Phil Lane <patterntrader@xxxxxxx>
To: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
Date: Saturday, September 02, 2000 10:25 AM
Subject: Mutual Funds exposed
Things are not exactly the way they may seem to be (as usual). The attached
chart shows the long term curves of 2 leading mutual funds compared to the
Nasdaq Composite Index.
Notice how the fund curves are virtually identical to the market! Only the
scale factors are different. Basically everytime the market tanks so do the
funds. So the managers get paid the big bucks for doing something - but I'm
not sure what.
Question: Is anyone aware of a no-load growth mutual fund out there where
they actually sell out on the way up, or near the top, instead of enduring a
nasty decline with the overall market? I don't need a fund that sits on
stocks as they get hammered, I can do that myself!
Best rgds,
Phil
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