That's Interesting

  • Bloated Disclosures: Can ChatGPT Help Investors Process Financial Information?

    Generative AI tools such as ChatGPT can fundamentally change the way investors process information. A probe into the economic usefulness of these tools in summarizing complex corporate disclosures using the stock market as a laboratory, shows that unconstrained summaries are dramatically shorter, often by more than 70% compared to the originals, whereas their information content is amplified.

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  • Learning by Consuming

    Mutual fund managers increase investment allocations to companies manufacturing automobiles they have purchased. This effect is stronger (weaker) when these customer-managers have positive (negative) consumption experiences, as measured by repeat purchases (positive), brand switches, and swift resale after purchase (negative).

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  • Sensation Seeking and Hedge Funds

    This article shows that, motivated by sensation seeking, hedge fund managers who own powerful sports cars take on more investment risk but do not deliver higher returns, resulting in lower Sharpe ratios, information ratios, and alphas. Moreover, sensation-seeking managers trade more frequently, actively, and unconventionally, and prefer lottery-like stocks.

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  • Fortunate Timing: Scheduled Insider Trades, Earnings News, and Spin

    In a sample of scheduled (10b5-1 transactions) routine sales by insiders that occur between 2015 and 2020, we find evidence of an increased incidence of favorable earnings-related news occurring in the weeks leading up to large sale transactions (greater than $1 million).

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  • How to enjoy your retirement

    Coinciding with 30 years of compulsory superannuation, the start of a new financial year and the introduction of the Retirement Income Covenant, Firstlinks surveyed its readers to find out how they spend their retirement.

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  • A Wikipedia Narration of the GameStop Short Squeeze

    This paper examines the usefulness of Wikipedia pageviews as indicator of the performance of stock prices. An examination is conducted on the GameStop (GME) case, which drew the investors’ and scholars’ attention in 2021 due to the short squeeze, and its skyrocketing price increase since 2021.

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  • Chasing dividends during the COVID-19 pandemic

    This paper investigates the impact of the coronavirus disease 2019 pandemic on investors’ trading behaviors around ex-dividend dates in Europe.

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  • What Moves Markets?

    What share of asset price movements is driven by news? This article finds that news account for about 50% of all bond and stock price movements in the United States and euro area since 2002, suggesting that a much larger share of return variation can be traced back to observable news than previously thought.

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  • Why Do Wealthy Parents Have Wealthy Children?

    Strong intergenerational associations in wealth have fueled a longstanding debate over why children of wealthy parents tend to be well off themselves. We investigate the role of family background in determining children’s wealth accumulation and investor behavior as adults.

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  • Riders on the Storm

    “A country’s interest rate often reflects more than just the policy stance of its central bank.  Movements in the global neutral rate of interest and the domestic neutral rate also play a significant role.”

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