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Mad Money Still Mad?

September 26, 2022 • Posted in Animal Spirits, Individual Gurus

Does coverage of stocks on Mad Money attract attention to them and affect their returns? In their August 2022 paper entitled “Does the Mad Money Show Cause Investors to Go Madly Attentive?”, Lawrence Kryzanowski and Ali Rouhghalandari examine reactions of investors to stocks related to Mad Money guest interviews and buy/sell recommendations. They measure impacts on investor attention to the stocks via associated SEC EDGAR activity (segmented into retail and institutional users based on IP address) and via number of relevant posts on Stocktwits. They measure abnormal returns based on cumulative 5-factor alphas (adjusting for market, size, book-to-market, profitability and investment effects) from 10 trading days before through 20 trading days after coverage relative to the interval from 230 trading days to 30 trading days before coverage. Using attention and return data for all stocks covered on Mad Money during June 2006 through December 2020, they find that:

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