The purpose of this paper is to investigate to what extent mutual fund managers, as an important and representative group of professional investors, are prone to overconfidence and associated behavioural biases such as self-serving attribution. More importantly, we explore how these...

Firms that file for Chapter 11 are actively traded. This paper investigates who trades these bankrupt firms and why. We also examine the potential pricing impact of this active trading. We find that the unique lottery-like characteristics of bankrupt firms make them attractive to a particular...

This study explores whether sell-side analysts recognize firms' going-concern (GC) difficulties, and whether and how they report going-concern uncertainties to investors. We show that analysts are aware of impending firm going-concern problems on the basis of their tendency to downgrade their...

Financial economists are unable to provide plausible explanations for Internet stock valuations during the recent asset pricing bubble consistent with market rationality. Adopting a psychoanalytic perspective, this paper argues that investors became caught up emotionally with the drama leading...

We examine whether mutual fund managers have differential skill in the buy and sell domains. Although they have characteristic-timing ability in aggregate, we show they exhibit asymmetric ability when buying and selling. Our key finding is that fund managers with superior selling ability are...

This paper examines the role conviction plays in asset management and its relationship with investment returns. We measure the strength of fund manager conviction through a fund’s Active Share, i.e., the extent to which an investment portfolio differs from its benchmark index. First, we show...

This study examines the impact of integral emotions on portfolio decisions and asset prices. Using a new dictionary of anxiety- and excitement-related keywords, we measure the emotional state of the market and compute firm-level sensitivity to changes in market-level emotions (i.e., emotion...