Monday, July 27, 2009

Are Institutions Participating in the Rally?

We recently broke the S&P 500 into 10 deciles (10 groups of 50 stocks) based on the amount of a stock's shares that are held by institutions. We then calculated the average performance of the stocks in each decile since the rally ramped up again on July 10th. As shown below, the two deciles of stocks with the most institutional ownership are up the most, while the decile of stocks with the lowest institutional ownership is up the least. Based on this analysis, institutional investors do believe in the rally, and maybe even more than individuals.

Decile727

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Lunch is for wimps

Lunch is for wimps
It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another.