An Efficient 2% of the Market

This morning's Journal has a very interesting article about Steven Cohen and his $10 billion hedge fund complex, SAC.

A few facts you may want to consider

1. At $10 billion, SAC is equal to approximately .04% of US stock exchange market cap, but accounts for 2% of daily volume.
2. Traditionally SAC has made money by rapidly trading in and out of stocks.
3. SAC is now establishing an "intrinsic" group dedicated to holding stocks for the "long-term"
4. "long-term" means 6-12 months to Cohen
5. Cohen's first and last concern listed in the story is that other funds could rush out of SAC's "long-term" holdings and crush the price of those stocks
6. Cohen has been a quick in and out trader for 20 some years, suddenly his is a "long-term" investor with very short term concerns.

So my question to you is: how do you think this 2% of the market would react to a sudden correction?

Timothy Burger
timothyb(at)timothyburger.com