Institutional investors

Are you saying that Mutural Funds such as Value Line could beat the market but pay extra commissions to belong to the old boys club? If Value line bought their #1 stocks at a decent price they whould have beaten the s&p hands down.
JJ

 

"Why is it that the large funds with all their information and resorces can not outperform the S&P?"

For the same reason that the ex coaches and players on the sports shows can't pick the winners any better than you or me.

 

Maybe so, but Value Line could really pick them. Have you ever seen their historic perfornmance?
JJ

 

Alright, JJ, let's assume this is indeed the case. Does VL even offer a fund that invests exclusively in stocks ranked #1? I can't find one that does so. They offer several equity funds but, according to the prospectus for each, they invest in stocks ranked #1 and #2 (and even some ranked #3). Where's the "#1 Only Fund"???

 

"Can we find out what the institutions are doing and be on the other side of the order or is this a specialist's opportunity only?"

If you want to know what the fund managers are buying and selling just subscribe to IBD. Of course this does not mean that you will be right; only that you will be on the other side of their trade.

 

Optrader: I'm sure that's correct, I have not followed them for some time, but I'm sure a conbination of #1 and #2's could have beaten the S&P.
Private: What is IBD? Investor's Buisiness Daily?
JJ

 

Yes, that is correct. Some popular funds and what they are currently buying and selling are listed in that newspaper. Maybe if you combine the information with the Money Flow indicator you might have something. If not, well, then maybe indexing is for you.

 

We can usually figure out when their is fund activity by reading the tape during the day. Larger blocks, stable price support, matching trade (size) with the Specialist, all these things are "broadcast" loud and clear. When they are "getting out" the MOC's along with Opening activity is usually an easy indicator to read.

 

Yesterday's article in the WSJ is great, it outlines how to make money in Mutual Funds......by starting your own. The article details how merge winning funds with losers to eliminate "bad track records" - how to bolster a funds performance so that it can get close to basic market performance, and how to keep raising money from the (uninformed) public. Feb 5th WSJ "Getting Going" by Jonathan Clements...Check it out