What Happens in Vegas Stays in Vegas? Firsthand Experience and EDGAR Search Activity in Las Vegas Casino Hotels

Abstract

What role does investors’ firsthand experience have in stock selection, and does this firsthand experience lead to better investment outcomes? Using a unique dataset containing the stock research activities of patrons of Las Vegas casino hotels, we find evidence that investors’ firsthand experience motivates interest in Vegas-related travel industry stocks. Additionally, their interest in these stocks predicts strong performance; Vegas interest leads to positive abnormal returns of up to 3.7% over the following year, and abnormal returns are highest in industries that are related to Las Vegas.

Keywords: Investor search activity, Firsthand experience, Investment decisions

JEL Classification: G10, G14, G41