The Smart Money is Buying Good Stocks from Scared Little Investors. The scenes on the stock-market this week were enough to scare away most retail investors. The bear stood up and snarled. Buyers scattered. The average trading volume on the top 200 stocks was near the lowest levels of the year.
Who's surprised? No-one. Small investors stopped, dropped and rolled to avoid getting burnt. But the big institutional money was buying. We noticed one stock in particular was pretty damn popular.
Are the big players making a mistake? Possibly. Nothing's certain in markets. This is the most uncertain of markets too. It goes from crushing depression to soaring optimism in hours. We're a little dizzy.
Cheapness is spreading though. And that makes good buying opportunities easier to find.
So the smart money quietly crept back into the market.
The stock we're thinking of was PrimeAg (ASX:PAG), the little farming property owner. This is an observation, by the way, not a recommendation. But in the same week that most brokers were avoiding phone calls from their clients, three big investors moved in on the company.
Agriculture fund manager Altima spooned a lavish 7.5% slice of PrimeAg onto its plate. Credit Suisse helped itself to 7.44%. AMP, perhaps on a diet, took a smaller bite of 5%.
That was in one week. Westpac and Kinetic Investment Partners took 5% each in August and July. PAG is getting peppered with new investment from big players. No wonder. It's cheaper than it's ever been.
Maybe retail investors are selling just when stocks are cheap. "Instos" are cleaning up the tastiest scraps. Their buys are accelerating - and you can see it coming through in some share prices.
PAG Price at posting:
$1.32 Sentiment: None Disclosure: Not Held
