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The best
informed investors are those with the most to lose, and those most frequently
at risk. Otherwise they don't survive.
When institutions
like mutual funds and pension funds make investments they buy stocks in big
amounts, called blocks. The brokers handling these trades are block traders,
and are usually the most experienced and skillful people in their firm. Why?
The average block trade is 25,000 shares of a $40 stock, or a $1 million ticket.
Upwards of 35,000 of these trade each day. If the broker wants to do the trade,
he has to do it quickly, and near the price the institution wants.
In 90% of these
trades the broker has to buy or short some part of the block that cannot be
placed with other investors. He has a lot to lose, frequently. |
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With so much riding on their bets block traders see to it that they stay well
informed, gathering information from every possible source to be immediately
at hand in support of their trading decisions.
The future is a risky
place, so they don't take any unnecessary chances. Along with being superbly
informed, they protect themselves with insurance covering their upside and
downside risks.
They won't buy more insurance
than they need, because its cost comes out of their trading profits. We know
how to translate what they are willing to pay for the insurance into their
forecasts of how far the stock's price might run, both up and down.
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By looking at their price range forecasts
you have both upside and downside prospects for price change. Measures which
can be compared directly between stocks, regardless of the company's type of
business.
Our 20+ years experience shows that it is more profitable to bet with these
pros, not against them. They do know when stocks get cheap, and where there
may be trouble.
No matter how you come to your stock value conclusions, we believe you should
know what these well-informed, active professionals think. Buying and selling
at better prices can add significantly to your returns.
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