Does the Mad Money Show Cause Investors to Go Madly Attentive?

49 Pages Posted: 14 Oct 2022

See all articles by Lawrence Kryzanowski

Lawrence Kryzanowski

Concordia University, Quebec - John Molson School of Business

Ali Rouhghalandari

Concordia University

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Abstract

We study Mad Money Show’s effects on investor attention and financial markets. Significant effects of Show mentions/recommendations on retail and institutional investor attention differ for buys and sells,  emphasis allocated to a stock,  and remain after controlling for potential moderating events. Induced investor attention subsequently affects abnormal trading volumes and short-sales activities of both investor types, and retail-investor portfolios. Significantly positive (negative) following-day abnormal returns for buy (sell) recommendations become significantly negative (positive) by day 20. Findings are consistent with effects of potential media influencer on limited investor attention, short-term price pressure associated with noise traders, and contrarian investor shorting.

Keywords: Retail and institutional investor attention, Media influencers, Behavioral finance, Trade and return effect

Suggested Citation

Kryzanowski, Lawrence and Rouhghalandari, Ali, Does the Mad Money Show Cause Investors to Go Madly Attentive?. Available at SSRN: https://ssrn.com/abstract=4247374 or http://dx.doi.org/10.2139/ssrn.4247374

Lawrence Kryzanowski (Contact Author)

Concordia University, Quebec - John Molson School of Business ( email )

1455 de Maisonneuve Blvd. W.
Montreal, Quebec H3G 1M8
Canada

Ali Rouhghalandari

Concordia University

Montreal
Canada

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