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LONDON, May 15 (Reuters) Base metals prices tumbled at the London Metal Exchange on Monday as some speculators cashed in and sentiment turned against copper, fund managers said.

''We decided on Friday we would come out of copper,'' a European pension fund manager told Reuters.

Copper, which has almost doubled in price since the start of year, has steamed into the public eye lately.

''As soon as it starts being in the newspapers it's too late to get in, so it's probably the time to get out,'' he said.

''We were way above where we thought we could get to, so we thought we'd sell a chunk and take profit.'' He was not yet ready to exit commodities completely, but was much less confident that he could make money by buying commodities futures.

''We still think we need to have commodities, but to say we are as bullish as we were three months ago is an overstatement. Likewise to say it's a general bubble is also an overstatement, but copper was very high.'' Some shrewd managers had closed their long positions and left the market, another fund manager said, referring to the base metals ''bubble''.

''The smart people have stopped being long and got out of the market,'' he said.

All eyes in the market are trained on the funds for when they decide that copper is likely to rise no further, and start to sell their long positions. When this happens, prices will fall rapidly, traders expected.

Market talk has recently been rife with comparisons between copper now and the dot-com bubble of the 1990s, though traders said that unlike shares of implausible internet ventures, metals like copper and aluminium will always have a use and therefore a value.

A third fund manager said that today's plunge was a correction rather the beginning of a flight of capital, to be expected after the frenetic upward run and part of a trend of volatility in a generally rising market.

''A correction is well due...things can't go in a one-way line all the time,'' he said. ''It's all part of the ebb and flow of money.'' At 0828 GMT three month copper futures had fallen to $7,700/7,900 a tonne, down 8.8 percent from Friday's close of $8,460 and over $1,000 below its high of $8,800 set last Thursday.

It recovered slightly to $7,920/7,950 by 1107 GMT.

In such a jittery atmosphere the rumour mill went into overdrive, with talk swirling of some trading firms having suffered heavy financial losses in recent weeks, caused by heightened volatility and increased margin calls.

NOT JUST COPPER Where copper leads, other LME metals usually follow.

Aluminium was quoted as low as $2,930/2,980 versus $3,095 on Friday and zinc slipped nearly 10 percent before recovering slightly to $3,350/3,380, down 9 percent.

Last week copper hit record highs as pension funds, encouraged by a fundamental picture of falling inventory levels, robust global demand, especially from China, and supply disruptions at mines in Chile and Mexico, continued their recent trend of buying futures in the metal in the expectation that prices would rise.

This interest from non-traditional investors has made copper one of the best-performing assets in the financial markets.

Copper has almost doubled since the start of the year, compared with the FTSE index of 100 leading shares from all sectors <.ftse>, which has risen less than five percent.

Shares in miners, which closely track the prices of their products, have also outperformed the market: Rio Tinto has gained 23 percent since the start of the year and Kazakhmys 63 percent.

Both were down on Monday, Rio losing almost 5 percent and Kazakhmys almost 7 percent in morning trading in London.

Monday's sell-off in commodities triggered general dollar buying.

The greenback, which had been under pressure for many weeks, rose against the euro , the yen and commodity currencies like the South African rand . [ID:nL15784429] ''There's quite a lot of liquidation of various asset classes at the momoment. People are liquidating stocks and gold.

Liquidation of gold in general typically benefits the dollar,'' a UK bank trader said.

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