Banter and general comments, page-11316

I have held a number of stocks that have slowly climbed up the ladder. The outcome may not be as one expects.

Some times good gains are immediately made and continue on for a while.

Some times the good gains happened up until the point of inclusion and then fall for a while.

Sometimes it was a non event and the stock basically kept doing what it was doing.

The advantage of inclusion is that more funds are required to hold the stock. The down side those same funds are then prepared to lend out the stock to others so that they earn interest on the side (creates greater short interest). Passive funds (index) generally don't care the impact, all they care about is staying in line with the index.

If inflows to the funds (index) are strong that does create buying momentum. If the funds are seeing outflows, it basically forces them to sell when in reality they shouldn't because the individual fundamentals are strong, again all they care about is staying in line with the index.

In other words, just be careful with your expectations.