why consolidate, page-19

afternoon,

"If there are trading houses that reject shares based on the number of shares, then they are hobbling their own performance for no good reason."

I haven't read it in a while ('One up on Wall Street' Peter Lynch - used to run Magellan fund) - I think Lynch covers a lot of this.

One of the biggest if not the biggest aims/concerns for a fund is to 'not look worse than the competition' ----- this in fact drives a totally different behaviour than you would expect an organisation to have that should be interested in wealth management.

Thats why they all buy similar things - and a lot of them may as well buy an index.

So in fact, yes they are hobbling themselves by staying away from mid caps and small stocks - purely out of the fear of being worse than the competition.

I remember from the book something like this - if a fund manager buys bhp and it goes south ------ his mates say to him "what is the matter with bhp lately?"

But if the same bloke buys fml and it goes south, then his mates say to him "what is the matter with you?"

So it not only works at an organisational level as a whole, it also works inside those organisations.

It is interesting that fml is held by the best performing British fund - to me that was a vote of confidence - in the top 50 from memory, and only just out of the top 40 - not bad for a little miner from Coolgardie.

have a good day

Pinto