"WHAT: Investment funds.....change in mandates/risk parameters...what utter claptrap!!"
Anti, no I haven't read the book.
Instead I lived the reality first hand inside reputable investment institutions.
The reality - as opposed to the make-believe - reasons why investment funds legitimately sell stocks for reasons of risk management/compliance/ mandate change goes something like this:
EVENT: Daily Risk Compliance Meeting:
ATTENDEES: Chief Investment Officer (Meeting Chair) Portfolio Manager Compliance Officer Fund Accountant Head of Trading
WHAT HAPPENS AT MEETING: Fund Accountant tables Risk Report. Risk Report contains exception reports of portfolio positions that are in breach of risk limits. (For example, one of the fund’s risk parameters might be that it cannot own stocks below a certain market capitalisation; another might be automatic portfolio adjustments for sectors in which the fund has become excessively overweight, yet other risk parameters might apply to stocks that exhibit certain share price momentum – either positive or negative... so there are many reasons why risk management around portfolio construction involves the buying and selling of certain stocks. There is a constant re-calibration that needs to occur in order to keep share portfolios “looking” and therefore “behaving” in a certain way; portfolio theory is a very complex field and my first-hand observations are that Portfolio Managers spend as much time on portfolio construction as they do on individual stocks within the portfolio.) Portfolio Manager works out the amount of stock that needs to be sold in order to comply with risk limits. Portfolio Manager instructs Head of Trading to execute accordingly.
WHAT HAPPENS AFTER MEETING: Head of Trading provides dealfish sheet to dealing desk. Dealers execute orders, acting as genuine, bona fide, legitimate sellers. Importantly, those genuine sales may take the following trading day to complete or they may take a few days to complete. I've even known stock execution to take weeks, in the case where liquidity is limited.
Now, I am not sure what you find so incredulous about that account.
It certainly explains ONE of many sources of selling far better that the vague curse of the zany, madcap band of manipulators.
The point is that on any given day I promise you that no one knows why all the selling - or all the buying - is taking place.
It is too complex to know.
Like I say, first hand experience.
Adam
PS. Experience not garnered at, from, nearby, or in conjunction with, Macquarie Bank
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