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Performance Anxiety: Big Money Now Praying for a Pullback

Posted Jun 04, 2009 01:19pm EDT by Aaron Task in Investing, Recession
Related: ^DJI, ^GSPC, SPY, DIA, DMND, AIPC, ^RUT
With the market seemingly in free-fall earlier this year, a lot of investors couldn't take the pain and sold at the bottom in March. What made this cycle unique is it wasn't just the small retail investors who panicked, as is often the case. A lot of big money managers also bailed, and now find themselves praying for a pullback, says Joseph Besecker, chairman and CEO of Emerald Asset Management, which oversees about $1.7 billion.

Having "broken their own rules," a lot of these institutional fund managers, notably pension funds, are now in a "quandary," Besecker says. Their high levels of cash should "put a floor" under the major averages, he says, especially if the rally continues until quarter's end, when performance anxiety will become acute among those underweight stocks.

In the meantime, Besecker's Lancaster, Pa.-based firm is focused on finding small- and mid-cap stocks he believes are well positioned to ride out the recession and take market share from weaker competitors.

Besecker talks about two such names -- Diamond Foods and American Italian Pasta -- in the accompanying video, taped Wednesday at The Big Picture Conference in New York.

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