26 Nisan 2012 Perşembe

Investor Mood

Some of the most controversial research in behavioral finance attempts to test whether investor mood affects prices. Mood research is controversial because the existence of the proposed mood effects implies profitable trading strategies that do not seem consistent with arguments for market efficiency. This  view is also controversial because it is so closely related to the central idea of behavioral finance in that something other than expected future dividends and risk affects stock market prices. if mood and emotions influence decisions, economists have much work to do (Shumway)

19 Nisan 2012 Perşembe

Smart and Dumb Analysts

Smart Analysts receive informative private signals about the stock market's expected return, dumb analysts receive uninformative signals. The smart analysts' signals are positively cross- correlated, implying that smart analysts following their private information have a tendency to act similary. Consequently, in certain circumstances, an analysts can "look smart" bye herding.. by Graham (1999)

18 Nisan 2012 Çarşamba

Why LSV?

As previously mentioned, there is wealth of empirical herding studies that directly follow the work of Lakonishok,  Shleifer and Vihny (1992). Many use the same herding measure (henceforth called the " LSV herding measure"). by Mark S. Seasholes 

6 Nisan 2012 Cuma

Herd Behavior

For an investor to imitate others, she must be aware of and be influenced by others' actions. Intuitively, an individual can be said to herd if she would have made an investment without knowing other investor's decision, but does not make that investment when she finds that others have decided not to do so. Alternatively, she herds when knowledge that others are investing changes her decision from not investing to making the investment ( S. Bikhchandani and S. Sharma - 2001)

3 Nisan 2012 Salı

Blind

Let them alone: They be blind leaders of the blind.And if the blind lead the blind, both shall fall into the ditch.
by Mattehew