Investing Research Articles

Can traders exploit irrational reactions to Jim Cramer’s stock recommendations by viewers of CNBC’s Mad Money? In their March 2006 paper entitled “Is the Market Mad? Evidence from Mad Money“, Joseph Engelberg, Caroline Sasseville and Jared Williams measure the market’s reaction to Mr. Cramer’s buy recommendations. Using a sample of 246 initial recommendations made by… Keep Reading

…the value of a company’s equity depends on its future cash flows (derived from the company’s growth rate and return on investment) and on the required return on equity.

…mutual fund investors should favor funds having ownership stakes, which directly align managerial incentives with investor goals.

…economic activity generally transcends politics in politically free societies.

…investors should generally ignore advertising in choosing mutual funds; they should consciously control their fund search methodologies to achieve rational decisions.

We evaluate here the market commentary of Ben Zacks over the period June 2002 through January 2005. Ben Zacks is a co-founder of Zacks Investment Research and Senior Strategist and Portfolio Manager at Zacks Wealth Management Group. Since January 2005, Zacks.com has discontinued making his regular commentary publicly available (and removed his past commentary). The table… Keep Reading

…stock message boards accelerate information dissemination and maybe analysis, but they do not reliably reveal new information (lots of opinions and little or no private information). Message board sentiment does not predict stock returns.

…the claimed past performance of the New America Index is probably overstated with respect to realistic expectations for actual trading of the stocks in it.

…investors/traders should consider a courtroom-like discipline in determining the value of a guru’s advice. It may be that very few stock market gurus would qualify as expert witnesses.

…even sophisticated hedge fund investors could improve their returns by relying more on homework and less on gurudom.