From: "DP" 
Newsgroups: uk.finance
Subject: Re: Trackers
Date: Fri, 9 Apr 2004 23:06:11 +0100

> It is a surprise in some ways, given that for one fund to buy a share
> someone else has to be selling, and they can't both be right.

A great oversimplification. The market maker holds a big chunk of shares.
Whatever people want to do - buy or sell - he/she must oblige. He/she also
sets the price. If more people want to buy than sell, the market maker
quickly puts the price up until balance is restored. If the market maker
wants to slow things down he/she can make the difference between the buying
price and selling price wider.

No trader is "right" all the time. The good traders are right more times
than being wrong.

The number of traders and shares is enormous. There is always someone
wanting to increase a holding of a certain footse share and there is always
someone wanting to decrease their holding. Think of pop stars. You can
always find someone who hates whoever is at the top of the charts. There is
no right and wrong, just different opinions.

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