Superficial habits: Influence and predictive value of Seeking Alpha articles

54 Pages Posted: 5 May 2022 Last revised: 5 Oct 2023

See all articles by Wolfgang Breuer

Wolfgang Breuer

RWTH Aachen University

Andreas Knetsch

RWTH Aachen University

Eric Sachsenhausen

RWTH Aachen University

Date Written: October 5, 2023

Abstract

We show that recommendations issued by Seeking Alpha authors can affect trading activity substantially. A recommendation’s chances to become influential in this sense are larger for more accessible articles and depend on characteristics which are observable without reading the text. One potential explanation of this finding is that Seeking Alpha community members are reluctant to spend much effort reading full articles and instead use superficial criteria to decide which articles to follow. Article features that are consistent with a detailed, in-depth analysis provide more valuable long-term investment advice. However, such articles appear to gather less interest from readers. We provide tentative evidence for profitable investment strategies based on those article features.

Keywords: Analysts, Seeking Alpha, Social Media, Investment Research

JEL Classification: G14, G17, G41

Suggested Citation

Breuer, Wolfgang and Knetsch, Andreas and Sachsenhausen, Eric, Superficial habits: Influence and predictive value of Seeking Alpha articles (October 5, 2023). Available at SSRN: https://ssrn.com/abstract=4097971 or http://dx.doi.org/10.2139/ssrn.4097971

Wolfgang Breuer

RWTH Aachen University ( email )

Templergraben 55
D-52056 Aachen, 52056
Germany

Andreas Knetsch

RWTH Aachen University ( email )

Templergraben 55
52056 Aachen, 52056
Germany

Eric Sachsenhausen (Contact Author)

RWTH Aachen University ( email )

Templergraben 64
Aachen, 52056
Germany

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