Yes, Virginia, there are Superstar Money Managers

28 Pages Posted: 14 Jul 2021 Last revised: 23 Jul 2023

See all articles by Valentin Dimitrov

Valentin Dimitrov

Rutgers, The State University of New Jersey - Accounting & Information Systems

Prem C. Jain

Georgetown University - Department of Accounting and Business Law

Date Written: July 16, 2023

Abstract

We investigate the stock-picking abilities of prominent money managers, utilizing a unique dataset of stock recommendations published in the prestigious Barron’s Roundtable spanning 1968 to 2019. Our analysis of 3,472 recommended stocks reveals a consistent pattern of outperformance, with an average excess return of 4.1% over the 30 trading days following the Roundtable meeting date. This outperformance is highly statistically significant and shows no long-term reversals, suggesting a permanent adjustment to value-relevant information rather than a temporary effect. Furthermore, our findings indicate that this skill has not diminished over time, despite significant changes in the investment environment. Our study provides compelling evidence of skill among money managers and underscores the value of exploring diverse datasets in financial research.

Keywords: mutual funds, management skill, alpha, Barron's Roundtable, returns

JEL Classification: G23, G20, G11, J31, J24

Suggested Citation

Dimitrov, Valentin and Jain, Prem C., Yes, Virginia, there are Superstar Money Managers (July 16, 2023). Georgetown McDonough School of Business Research Paper No. 3885288, Available at SSRN: https://ssrn.com/abstract=3885288 or http://dx.doi.org/10.2139/ssrn.3885288

Valentin Dimitrov (Contact Author)

Rutgers, The State University of New Jersey - Accounting & Information Systems ( email )

1 Washington Park
Newark, NJ 07102
United States

Prem C. Jain

Georgetown University - Department of Accounting and Business Law ( email )

McDonough School of Business
Georgetown Univeristy
Washington, DC 20057
United States
202-697-9455 (Phone)

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