The "Dartboard" Column: The Pros, the Darts, and the Market

38 Pages Posted: 27 Nov 1996

See all articles by Bing Liang

Bing Liang

University of Massachusetts Amherst - Department of Finance

Date Written: November 1996


This paper examines analysts' security recommendations in the "Dartboard" column of the Wall Street Journal and tests whether the impact on the recommended security prices is temporary or permanent. We document a two-day announcement effect for the experts' stocks, which exhibits mean reversion and varies with experts' reputation and stock sizes. Our study supports the price pressure hypothesis: abnormal returns and trading volumes following the announcement date are driven by noise trading from naive investors. The bootstrapping results indicate that the performance of the pros' stocks is indistinguishable from that of the dartboard stocks for 90% of the contests. Overall, pros can neither outperform the darts nor the market. By examining the pre- and post-contest periods, we find that pros follow relative strength strategies to choose past winners with high risk and low dividend yields, but the stock prices of these winners tend to show mean reversal in the subsequent period. In addition, a lower bound for sample size is derived for reliable statistical inference on mean returns.

JEL Classification: G14, G11, C15

Suggested Citation

Liang, Bing, The "Dartboard" Column: The Pros, the Darts, and the Market (November 1996). Available at SSRN: or

Bing Liang (Contact Author)

University of Massachusetts Amherst - Department of Finance ( email )

Amherst, MA 01003
United States

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