After a string of years in which security analysts' top stock picks significantly outperformed their pans, the years 2000 and 2001 were disasters. During those two years, the stocks least favored by analysts earned an average annualized market-adjusted return of 13.44 percent whereas the stocks...

The financial press makes frequent and bold claims regarding the performance of investment clubs. One oft quoted figure from a National Association of Investment Club survey states that 60 percent of investment clubs beat the market. Are these claims myth or reality?We analyze the common stock...

Individual investors who hold common stocks directly pay a tremendous performance penalty for active trading. Of 66,465 households with accounts at a large discount broker during 1991 to 1996, those that traded most earned an annual return of 11.4 percent, while the market returned 17.9 percent....

Theoretical models predict that overconfident investors trade excessively. We test this prediction by partitioning investors on gender. Psychological research demonstrates that, in areas such as finance, men are more overconfident than women. Thus, theory predicts that men will trade more...

Barber and Lyon (1997a) and Kothari and Warner (1997) document that standard tests of long-run abnormal returns are misspecified. In this research, we evaluate alternative methods to test for long-run abnormal returns. We document that two general approaches yield well-specified test statistics...

A vexing problem for the appraisal industry has been estimating an appropriate discount for the value of real estate limited partnerships (RELPs) relative to their appraised value. This research develops a linear regression model that explains over 80% of the cross-sectional variation in...

We document that long-run market-adjusted cumulative abnormal returns generally yield positively biased test statistics, while long-run market-adjusted buy-and-hold abnormal returns generally yield negatively biased test statistics. However, these general results are sensitive to (1) the period...

Fama and French (1992) document a significant relation between firm size, book-to-market ratios, and security returns for nonfinancial firms. Because of their initial interest in leverage as an explanatory variable for security returns, Fama and French exclude from their analysis financial...

This research analyzes the recall experience of threeAmerican (Chrysler, Ford, and GM) and three Japanese (Honda, Nissan, and Toyota) automakers during the period 1973-1992 to provide more conclusive evidence that the stock market imposes a reputation penalty on automakers that produce...