Broker Data, page-41

Hi Nasa,

The thing is, it might look negative in the short-term to see all retail punters buying and brokers selling (and it probably is) but the irony of the funds mgmt industry is that, given their plethora of mandates, they're often not buyers of a stock until it is significantly de-risked but trading at a much higher price than where people like us on the MRF thread were buying. For some managers, they won't even touch a stock until it enters the ASX300. This is why you often see sharp kicks or falls in stocks as they enter/exit the ASX300, as fund managers are forced to re-weight their portfolios, regardless of their opinions on the stock.

Funds are also working with hundreds of millions of dollars under management, so a stock like MRF simply doesn't have the liquidity or market cap to interest them; not until its market cap is 10 times higher and they're producing and have cash flows. By then, we'll be laughing all the way to the bank. For example, for a sizable fund, a 100% ROI for a $250k investment in MRF would barely even alter the fund's net return to investors; contrast this with a modest 10% ROI for a $10M investment in TLS, which also has outstanding liquidity and can be sold at any time of the day with tight spreads.

I had an interesting chat with Pisces the other night about fund manager mandates, which you might find useful.

http://hotcopper.com.au/threads/the-big-boys.2493940/page-114?post_id=15303080#.VVvn9Pmqqko

Cheers