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FWIW: CLEARIFICATION OF INSTITUTION
By: stervc
23 Nov 2004, 06:31 PM EST
Msg. 122614 of 122824
(This msg. is a reply to 122167 by stervc.)
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Let’s Further Explain the Institutions…
I was really trying to not take this to this level, but now I see that I think it must be done. Heck, I really was trying to keep it simple. Ok, when NITE, a Market Maker (MM), naked short a stock, are they really naked shorting the stock themselves or are they naked shorting that stock for their “clients?” Well guess who’s considered the responsible entity? Yep, you’ve guessed it… NITE! Not their clients!
It’s kind of the same logic here with these Institutions. It was explained to me that these major Institutions are made up of major Investors that are considered being on the same level of investing wisdom as the Institution itself. These major Investors within the Institutions are called “clients.” They are often considered one in the same from what I was told. Generally these Institutions are made up with their clients of hundreds of major investors. These clients must meet certain criteria to be given that respect for being a quality investor, but once given, they are considered as wise as the Institution itself for making investing decisions. I was told that they could be considered one in the same for making investing decisions for quality. They are considered part of the Institution itself. Some even think the decision of the client holds more merit than the portfolio manager within the group as I will explain why a little later.
Without these major Investors, the major Institutions would not exist to the level of importance that we have come to know them as today. This I was told by some major Institutions. Again, that’s what the major Institutions are, a group of major Investors that are not even to become part of that Institution unless they have as a minimum, $800,000 to start with, but usually higher as I was told. Most of the time you must have millions to even become part of the group.
I called and talked with a few Institutions. Some I did not talk with, but BEATY HAYNES & PATTERSON INC and GREYLIN INVESTMENT MANGEMENT INC gave me the most interesting thoughts of them all. I’ll sum it up for everyone as to why I made the post the way I did. Both of these Institutions are major Institutions that have CMKX showing up in their portfolio. I also called some other Institutions too and all generally said the same thing although some were not as nice as others. A couple of guys had more of a negative slant on things and thought I was trying to be a wise guy with the way I was questioning them. The egos were shown after only asking the first question. Heck, I was just trying to gather a full understanding of their Institutional process. LOL
These Institutions provide a Portfolio Manager for each client that decides what is best for the client. They are not always in full agreement of what should or should not be within the portfolio as some Institutions had stated. The Institutions act on instructions from their clients, but generally would never recommend the buying of any pink sheet stocks. Ultimately, it doesn’t matter because the client has the final word and sometimes provide instructions to buy a stock against the portfolio manager’s wishes. Again, whether it is the client within that Institution or the Institution itself, once the decision is made that a position is to be taken in a stock, it is considered to be on the same status made by the Institution from what I was told and because of the status of the client versus the portfolio manager, the client is considered an even more powerful statement. Still, the final decision is still considered coming from the Institution in representation which is why it is filed on the Form 13F with the SEC and filed/listed within the NASD database.
Let me better explain this. This is not like you or I receiving investing advice from a portfolio manager as if this was one of your mutual funds or something. Look at it like this. As an example, imagine a portfolio manager trying to tell Bill Gates that he should not be taking the risk to invest in a stock. Would you follow the investing lead of Bill Gates once he makes the decision to invest in a stock or his portfolio manger that might be at odds with Bill Gates about his decision? Personally, I’m willing to bet that Bill probably knows more than what he would be telling his portfolio manger to overrule his advice.
I was also told that it could be even more of a quality decision coming from the client because the client is the one who actually has the money to invest in a stock while the Portfolio Manager is the one that does not have the money and is only there to assist with the client and do not have the client’s statue or he would be a client him or herself to make the final decisions. Still, both the client and/or the portfolio manager are considered the “Institution” because of how the stock is placed in the client’s portfolio from the Form 13F file with the SEC. That logic is debatable too on the contrary.
My post was not to mislead anybody and my apology if it seemed as such. Bottom line someone with an Institutional type of respect have invested into CMKX and the amount doesn’t matter from my understanding and discussions. These types of investors normally would not waste any time at all to file or even look at any pink sheet stock if it was not for a reason of merit.
It’s important because they must see something that is worth risking. I know the amount seems small, but these types of investors are very conservative and have gotten to their levels of wealth mainly over time from being like such. Remember, I see the glass as half full and not half empty. From the way I see it, all of those positions are the largest positions by share count even though the amount of value is very small for now. Still, I think a statement has been made.
I was told that the egos of these major Investors would not even allow them to waste their time to even look at CMKX unless they saw something that existed for substantial long term gains. Maybe I’m seeing more into this than what I should. Maybe I’m not. The tricky part about this is that neither of us will ever know until key events take place and the name of the clients and/or their associates are revealed. Personally I didn’t and I am not going to do enough digging to see who they are. I am not that concerned as this will not be making me increase or decrease my position in CMKX. I was only trying to provide some food for thought.
Still too, having 8 different Form 13F’s filed with the SEC from some transactions to purchase shares in CMKX by either some major Institutions or major Investors as clients is a huge show of confidence in my opinion. Not trying to hype, but some huge entities with huge dollars are involved and they are involved for some positive reasons. I respect those who feel on the contrary, as some Institutions did say to pay attention to the dollar amount invested while some said to don’t focus on such and to focus on the fact they or their clients have even given CMKX the time to allow the filing of the 13F with the SEC to have even taken place.
Personally, I do think that some brain cells should at least have been wasted towards thinking some of the above thoughts so I shared them. I was trying to get around from explaining all of this in the earlier post because it’s really a matter of opinion from doing my DD as to the level of importance that should be given. Heck, there were differences of opinions between some of the Institutions when I had called them. You can call the same Institutions, get different people, and get different answers. So, who’s right or wrong? I don’t know? If I am wrong in my thoughts, it’s not the first and it won’t be the last I’m sure, but the earlier post and this post are only my opinions as to how I feel.
All is well!
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