The Equity Performance of Investment Newsletters

Posted: 6 Dec 1997

See all articles by Andrew Metrick

Andrew Metrick

Yale School of Management; National Bureau of Economic Research (NBER); Yale University - Yale Program on Financial Stability

Date Written: October 17, 1997

Abstract

This paper analyzes the equity-portfolio recommendations made by investment newsletters. The dataset spans 16 years, is free of survivorship and back-fill biases, and includes the recommendations of 145 different newsletters. Overall, there is no significant evidence of superior stock-picking ability for this universe of newsletters. Some individual letters do have superior performance records, but this does not occur more often than would be expected by chance, and these records are never more extreme than would be expected for the sample size. In addition, while there is some short-term performance persistence, a strategy of buying past winners does not earn statistically significant excess returns.

JEL Classification: G14, G20

Suggested Citation

Metrick, Andrew, The Equity Performance of Investment Newsletters (October 17, 1997). Harvard Institute of Economic Research Paper No. 1805. Available at SSRN: https://ssrn.com/abstract=42202

Andrew Metrick (Contact Author)

Yale School of Management ( email )

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New Haven, CT 06511
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(203)-432-3069 (Phone)

HOME PAGE: http://faculty.som.yale.edu/andrewmetrick/

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
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Yale University - Yale Program on Financial Stability

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P.O. Box 208200
New Haven, CT 06520-8200
United States

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