theory, page-2

Hi Marben,

I think you will find that a contributing force in the upward direction is the inclusion of EXT in the ASX300.

Many index funds use a simple formula where they apportion available funds across all 300 stocks in proportion to their position in the list.

Index funds have very low fees because they are not given a lot of management time, the formula dictates what they buy and sell.

Funds which are now forced to buy EXT and sell others which have dropped out of the ASX300 have a problem. They can't get sufficient shares to match the number required by the formula in their charter.

I am sure they will be agitating for a cap raising to make their jobs easier or they will be trying to buy off-market by approaching major holders.

However the excellent management at EXT will not do a cap raising now when it is not required, they will do it later when it will dilute our holdings a lot less.

Also, the top 20 has shown very little evidence of major holders selling, not just now but even years ago.

I suspect that you are right, that a techtonic shift is coming, it will be sudden and massive. All these little increments on a daily basis will be dwarfed by what is coming.

I keep saying it, sell at great risk. When the trading halt comes, and you are on the outside looking in, you will be kicking yourself for the rest of your life.