share bargains galore but the funds aren't buying

Is Alan Kohler believable??

A lot of analysts and investors are saying they can't find any value in the market at the moment and are staying out of it. Well, they're not looking hard enough.

After a 13 per cent correction, peppered by some huge maulings, the small-cap end looks a cornucopia of value. Likewise many of the resources stocks - both large and small. Many of the maulings have been deserved, such as Multiplex, but many have been overdone, such as Newcrest. In general, good value is easy to find.

One reason for the bearish sentiment and the overreaction to profit downgrades is that there is a cash drought: the institutional supply of funds has largely dried up. Broker opinion tends to follow the money rather than the other way around. Institutions are withholding cash; therefore there must be no value to be found.

In fact, fund trustees and managers are rebalancing. After a 27 per cent run-up between May 17, 2004, and March 21, 2005, they were overweight in equities and most have, or think they have, a duty to stick with standard allocations.

The re-balancing is now almost over........
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