← Back to all posts
- US and Europe have pension funds
- the key is to buy positions before the funds do and sell the positions to them once u get in
- in times of crisis, funds would want to move their fund into blue chip positions
- in times of abundance, funds would have too much capital to deploy and buy up all positions
- fund managers are hired to buy and sell stocks. To justify their continued employment they need to constantly trade
- the objective of fund managers is to trade
- the objective of fund managers is not on profit
- fund managers cannot hold on to cash as a position
- fund managers can at most retain 30% of the funds in cash
- Asian stock markets are less liquid because of the lack of huge pension funds
- New bosses of IPO companies will be enamored with constantly increasing share prices
- They might be willing to shell out their own money to buy up more shares to prop up price
- minor shareholders can sell off shares to screw up price of shares if they want to buy selling way below market price
- Crafty bosses might sell off one share at way below market price and then start buying back shares at that price. They might gain a lot of cash but screw up the valuation and future prospectus of the company for investors
- Stock price of companies in markets with poor liquidity is affected more by marketing that fundamentals