Here's a statistic that ought to make every long-term
investor shudder, courtesy of JMP Securities analyst Michael
Hecht: A mere
fivestocks were responsible for as much as 30% of
the trading volume on the New York Stock Exchange in
August.
It gets worse. Guess what those five stocks were?
Nope, guess again
Rather than transact in
Wal-Mart (NYSE: WMT),
Best Buy (NYSE: BBY), or any of the hundreds
of NYSE-listed companies with straightforward business models
and clean financials, these traders have been buying and
selling cheap financials. Take a look at their "top five"
list below:
Company
Average Daily Trading Volume,
Past 3 Months
Share Price Increase,
Past 3 Months
Citigroup (NYSE: C)
$630 million
57%
Bank of America (NYSE: BAC)
$259 million
29%
Fannie Mae (NYSE: FNM)
$127 million
141%
Freddie Mac
$70 million
155%
American International Group (NYSE:
AIG)
$46 million
136%
Data from Capital IQ, a division of
Standard & Poor's.
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