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Stone Fox Capital Advisors is a registered investment advisor founded in 2010. The firm offers portfolio management with a focus on opportunistic stocks providing secular growth trends at an affordable value. An emphasis is placed on fundamental analysis though charts are used for timing entry... More
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  • Stock Mutual Fund Outflows Continue Unabated 0 comments
    Aug 19, 2010 5:43 PM | about stocks: INTC, MFE

    Typical herd mentality for investors to be piling into bond funds at record low interest rates. They did it in 2000 with tech stocks. They did it in 2006-07 with real estate on the coasts and now bonds.

    ICI reported that total equity funds had a $1.4B outflow last week and over $12B for the last five weeks. The positive news is that bond funds had a lot more money flow into them leaving the weekly net increase of nearly $6B. When the market turns it could be sudden and dramatic.
    Until then though, it'll be difficult to gain much ground with dry powder held by institutions such as mutual funds continually sucked out.

      7/14/2010 7/21/2010 7/28/2010 8/4/2010 8/11/2010
    Total Equity -3,192 -1,157 -4,074 -2,201 -1,427
      Domestic -3,235 -1,402 -4,296 -2,122 -2,073
      Foreign 43 246 222 -79 646
    Hybrid 430 370 69 233 213
    Total Bond 6,138 7,931 7,099 7,551 7,169
      Taxable 5,200 6,944 6,112 6,350 5,788
      Municipal 937 987 987 1,201 1,382
    Total 3,376 7,144 3,094 5,583 5,955

    On a very bright note, Intel (NASDAQ:INTC) agreed to buy McAfee (MFE) for nearly $8B in cash. Though the 58% premium did nothing for the market today though it should've lit a fire under valuations, the deal will eventually lead to an $8B cash inflow to stock funds. Such deals do provide cash inflows for the market. Since corporations are flush with cash, they could provide the support needed as individuals continue to leave at the wrong time.

    Disclosure: No positions
    Stocks: INTC, MFE
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