Has Santa Claus a Good Long-Term Memory
19 Pages Posted: 7 May 2009 Last revised: 11 May 2009
Date Written: May 7, 2009
If Santa Claus had a good long-term memory, she would remember who had consistently been good in the previous years and would reward them accordingly. She would not only rely on the current year ‘I have been a good boy letter’ but she would look for long-term good behaviour to decide on her gifts allocation.
If investors – like Santa Claus – had a good long-term memory, they would purchase assets that have been performing consistently well in the previous years. Consistent good behaviour will be defined as ‘resilience’. If resilience is rewarded it should translate into higher volumes of transactions and insure the survival of the fund. This is – in short – my variant definition of a Santa Claus effect.
This Santa Claus effect will be tested on the trading of Australian Listed Property Trusts over the 1993-1998 period.
Keywords: A-REITs, LPT, santa claus effect, resilience
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