Investing Information

The conflict of appeal game - investing


Disgruntled investors are going after Wall Boulevard once again, this time accusing one of investment bank Morgan-Stanley's high-tech mutual funds of construction biased stock picks.

Recent lawsuits allege the Morgan Stanley Expertise fund was influenced to buy and hold stocks of companies that delivered huge investment banking fees - or could potentially bring big affair - to the investment bank.

According to the lawsuits, the Morgan Stanley fund followed the biased recommendations of the firm's analysts - decisions that have cost shareholders millions of dollars since the portfolio's October 2000 inception.

The fund lost 48 percent in 2001 and was down an added 50 percent all through the first nine months of 2002. While Morgan Stanley brightly denied the allegations, I fail to see how the management of the fund is come what may apparent from the other divisions of Morgan Stanley. Ultimately, they all work for the same boss.

The suits advance claim that the tech fund abortive to release that the firm had investment banking ties with a digit of companies whose stocks were part of the portfolio. They also abortive to bare that those links could assume the fund's buy or sell calls.

Why bring all this up? For one thing, it is attention-grabbing to note that Morgan Stanley obtainable four of these types of funds in October 2000. Just about the time when we sold all of our positions (Oct. 13, 2000) and it became clear, at least to those of us who were tracking long-term trends, that a major trend alter had taken place.

More a short time ago in the news it's been Merrill Lynch who had a questionable deal linking transactions with futile energy agent Enron. Of course, the monetary air force business regulates itself so well, that an $80 million payment to the SEC is ample to wrap up this case lacking admitting or denying wrongdoing.

What's the moral of this story? While it is awkward to predict these alleged conflict of advantage schemes, it is absolutely likely to adhere to a closely controlled accost and be on the "right" side of the promote so you can avoid jumping on the train a sinking ship.

About The Author

Ulli Niemann is an investment advisor and has been copy about objective, careful approaches to investing for over 10 years. He eluded the bear bazaar of 2000 and has helped hundreds of ancestors make advance investment decisions. To find out more about his accost and his FREE Newsletter, entertain visit: www. successful-investment. com

ulli@successful-investment. com


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