Price Pressure: Evidence from the 'Dartboard' Column

Posted: 7 Nov 1998

See all articles by Bing Liang

Bing Liang

University of Massachusetts Amherst - Department of Finance

Abstract

We investigate whether analysts' recommendations in the "Dartboard" column of the Wall Street Journal have an impact on stock prices and whether this impact is temporary or long-lived. We document a significant 2-day announcement effect that is reversed within 15 days. This announcement effect is intertwined with the pros' track record. Our study supports the price pressure hypothesis: abnormal returns and trading volumes around the announcement day are mainly driven by noise trading from naive investors. On average, investors following the experts' recommendations lost 3.8% on a risk-adjusted basis over a 6-month holding period.

JEL Classification: G12, G14

Suggested Citation

Liang, Bing, Price Pressure: Evidence from the 'Dartboard' Column. Journal of Business, Vol. 72, No. 1, January 1999. Available at SSRN: https://ssrn.com/abstract=138630

Bing Liang (Contact Author)

University of Massachusetts Amherst - Department of Finance ( email )

Amherst, MA 01003
United States

Register to save articles to
your library

Register

Paper statistics

Abstract Views
895
PlumX Metrics