Timing investing in shares with large wholesale investor purchases?

[DDH]

Hi everone,

Okay, this may be another silly question but...

Is there such a thing as a strategy where you invest in shares if/when a large parcel of those shares are bought by a wholesale investor? Bad example: If ABC buys 10 million shares in XYZ Ltd, can investors also consider investing in XYZ Ltd on the basis that ABC must see some imminent/future value in XYZ?

Look forward to reading your opinions!!

 

[skc]

Hi everone,

Okay, this may be another silly question but...

Is there such a thing as a strategy where you invest in shares if/when a large parcel of those shares are bought by a wholesale investor? Bad example: If ABC buys 10 million shares in XYZ Ltd, can investors also consider investing in XYZ Ltd on the basis that ABC must see some imminent/future value in XYZ?

Look forward to reading your opinions!!

Not really. There are many reasons why:

1. Who ever sold their shares in XYZ must have a different view to ABC.
2. Usually large block trades are done at a price that you are not going to get.
3. Just because ABC is a large wholesale investor doesn't mean they will get it right.

Consider each cash in its own merit.

 

[McLovin]

3. Just because ABC is a large wholesale investor doesn't mean they will get it right.

Indeed. When a large block trade is done it's usually one insto selling to another. Someone's going to be wrong.

 

[burglar]

Indeed. When a large block trade is done it's usually one insto selling to another. Someone's going to be wrong.

I buy something at a ridiculously low price. It goes multibagger.
I know it can't last forever. So I sell them to you.

You have seen them blossom from junior whatever into a major producer.
They have strengthened the balance sheet. Pay a great Divvy.
A good company at a cheep price.

Why then, is someone going to be wrong?

 

[McLovin]

I buy something at a ridiculously low price. It goes multibagger.
I know it can't last forever. So I sell them to you.

You have seen them blossom from junior whatever into a major producer.
They have strengthened the balance sheet. Pay a great Divvy.
A good company at a cheep price.

Why then, is someone going to be wrong?

In the context of the OP, wrong wasn't a bad choice of words. Ie trading because one insto is buying or selling, when the other side of the trade is probably another insto.

Once you're working with a few billion dollars FUM, it's not as easy as just moving in and out of stocks in Australia. For one thing, your universe is much smaller.