The value of columnists’ stock recommendations: an event study approach

The value of columnists’ stock recommendations: an event study approach This study examines the value of stock recommendations made by columnists in three leading business magazines; Business Week, Forbes, and Fortune during the period 2000–2003. Empirical results suggest that the anomalous returns documented in prior studies on columnists are sample specific and are not representative of columnist recommendations in general. We also investigate whether columnists’ timing, content and style affect the market reaction to recommendations. We find that recommendations that contain references to management or provide merger & acquisition related rumor trigger significantly greater market reactions. Finally, our long-term performance analysis of columnist recommendations suggests that investors following columnists’ advice during the 2000–2003 period would not have consistently earned abnormal returns controlling for market risk, book-to-market, size, and momentum effects. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Quantitative Finance and Accounting Springer Journals

The value of columnists’ stock recommendations: an event study approach

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Publisher
Springer US
Copyright
Copyright © 2009 by Springer Science+Business Media, LLC
Subject
Finance; Corporate Finance; Accounting/Auditing; Econometrics; Operation Research/Decision Theory
ISSN
0924-865X
eISSN
1573-7179
D.O.I.
10.1007/s11156-009-0114-2
Publisher site
See Article on Publisher Site

References

  • Comparing the stock recommendation performance of investment banks and independent research firms
    Barber, BM; Lehavy, R; Trueman, B
  • The event study methodology since 1969
    Binder, JJ
  • Efficient capital markets: a review of theory and empirical work
    Fama, EF
  • Market efficiency, long-term returns, and behavioral finance
    Fama, E
  • A performance comparison between cross-sectional stochastic dominance and traditional event study methodologies
    Larsen, GA; Resnick, BG

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