The Alchemist: Market Timing??

Posted in Money Matters on October 31, 2003

The following is this week’s installment of The Alchemist, a column by Mensan Al Thomas, author of If It Doesn’t Go Up, Don’t Buy It. Click ‘Read More’ below for this week’s article, “Market Timing??”

The Alchemist: New Bull Market

by Al Thomas


The recent criminal fiasco in the mutual fund industry is
being used by Wall Street to persuade investors that market timing is a
bad thing. The late trading by Janus, Bank America and several other
well known mutual funds is falsely being called market timing.


Wall Street, better known as Maul Street to most investors,
does not want to you to find out about market timing. The reason is very
simple. If you learn to sell you might take your funds and do something
intelligent with them.

First let’s understand what market timing is. Very simply
it is a proven method that gives signals to buy and another signal to
sell. Many of these methods are associated with stocks and mutual funds
yet there are those that signal overall market conditions. We are on the
verge of another sell signal for the general market and several market
timers have already given those signals to sell. There are many
excellent systems and they all beat the Wall Street lie of Buy and Hold.
The key to all market profits is selling not buying.

The criminal acts of the mutual funds had nothing to do
with this method. The hedge fund managers knew the stock holdings of the
mutual funds in question and AFTER the market closed companies would
make announcements of their earnings, new products approved by the FDA,
legal actions, etc. that would definitely impact upon the stock price
the NEXT day. If it was good news the fund would allow big money players
to place their orders after all official trading stopped. That’s
4:00PM New York time.


The fund price might be $20 per share, but depending upon
the amount of stock in their portfolio it might make the settlement
price the next day as much as 5% higher. That doesn’t seem like much,
but if you had shown a purchase of 10 million dollars on the close that
day and sold it out the next day you would have a profit of $500,000.
That is money removed from the fund that belongs to the shareholders.
This is NOT timing. This is fraud and the parties should not only repay
all those stolen monies to the fund, but should also see jail time and
be banned from the industry for life.


If you want to find out more about market timing type in
‘market timing’ on your computer and do a search. There are scores of
them, but you must do your due diligence to be sure that what they are
telling you is true. Always ask for references. Make them prove what
they say. Don’t bother to ask your broker as he will tell you the Wall
Street lie that it doesn’t work.


Because of the precarious nature of this market I encourage
you to look into this NOW.


Copyright Albert W. Thomas. All rights reserved. Author of “If It Doesn’t Go Up, Don’t Buy It!” www.mutualfundmagic.com. Comments to al@mutualfundmagic.com.