Replies to post #33557 on A.I.M. Users Bulletin Board (AIMUSERS)

[OldAIMGuy]

Hi Adam and Steve, Re: ETFs, Correlation and Stock Picking......

It would appear this high correlation between individual stocks and Index performance argues against the thinking of "hamburger prices." I think we've seen how the trading floor empties when someone f**ts. These swoons seem to hit all sectors, asset classes and the individual stocks in them.

My guess is the ease of buying and selling with ETFs is likely contributing to the situation as the author mentions. I guess if we watch for the swoons and have a good list of potential "favorites" those times would be good for hamburger prices.

I think I side with Adam here in thinking the article is combining apples, oranges and hamburger!

Best regards, Tom

[The Grabber]

Hi Adam

That means a flood of money is flowing into these baskets of stocks daily, and it doesn't discriminate between the fundamentally sound stocks and those that have problems. But the fact that many investors have given up on trying to pick quality stocks has actually created an opportunity for those savvy enough to try.

I took this to mean that since the 'herd' is plowing into ETF's, the opportunity to outperform is via well selected individual stocks that are currently out of favor relative to the overall market as defined by those index transactions.