Allen, David S. and Awang-Damit, Hamidah (1998) The Wall Street Journal investment dartboard: Market responses to recommendations of returning winners versus new contenders: Working paper series--98-03. Working Paper. NAU W.A. Franke College of Business.
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Abstract
We extend previous tests that examine the price and volume effects for stocks recommended in the Wall Street Journal's Investment Dartboard column. We split the sample into those stocks chosen by returning winners of previous contests and new contenders. Our results indicate that investors place greater price pressure on the stocks chosen by the "winners" compared to the "contenders." The wealth increase for both the "winners" and "contenders" is temporary, and returns to near the pre-event level by the twentieth day after the announcement. This finding is consistent price pressure being due to naive buying rather than new information being revealed. The relative trading volume shows that investors placed greater emphasis on the "winners" recommendations versus the recommendations of the "contenders." Finally, we show that the amount of price pressure observed increases with the success of the winner in the previous contest.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Publisher’s Statement: | Copyright, where appropriate, is held by the author. |
| Keywords: | Working paper, stock price, stock market prediction, price pressure |
| Subjects: | H Social Sciences > HG Finance H Social Sciences > HJ Public Finance |
| NAU Depositing Author Academic Status: | Faculty/Staff |
| Department/Unit: | The W.A. Franke College of Business |
| Date Deposited: | 19 Jan 2016 19:16 |
| URI: | http://openknowledge.nau.edu/id/eprint/1651 |
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