cstauffer

Down Fridays

I think that you will find that many hedge funds do indeed have an October 31 fiscal year end. There is absolutely no data related reason that caused the sell off over the last I was mistaken on the $30 billion figure, it was reported to have been $3.7 billion which was liquidated in its entirety during the days that the market first began to sell off.

I agree that the fact the mutual funds have an October 31 fiscal year end would have very little to do with the abrupt sell off.


On Oct 31 04:31 PM logicalthought wrote:

> First of all, hedge funds end their years on 12/31; it's the mutual
> funds that use 10/31, and if anything, the mutual funds would be
> more likely to "window dress" and spend money to mark up their year-end
> holdings, rather than let them get crushed.
>
> Second, Galleon had $3 billion in positions, not $30 billion, and
> had supposedly unwound almost all of them earlier in the week.<br/>
>
> I think there's now a different, more negative tone to this market,
> and you can see it in the broken charts of the financials, the transports,
> the Nasdaq and, perhaps, in the S&amp;P 500. I have no idea what
> happens Monday, but I think the S&amp;P will see the low 900s (if
> not lower) by year-end.

Down Fridays

Hedge fund fiscal year end with large unrealized gains over the preceding 6 months means that they most likely felt compelled to lock in those gains ahead of the GDP report in case it came in short. Let's not also forget that the Galleon hedge fund, which I believe was $30 billon was unwound over the last seven trading days or so. On balance, earnings and the economic numbers over the last two weeks did not change the outlook of the economic recovery for better or for worse.