Do Fund Managers Identify and Share Profitable Ideas?
43 Pages Posted: 4 Nov 2009 Last revised: 9 May 2012
Date Written: May 2, 2012
Abstract
We study data from an organization in which fund managers privately share investment ideas. Evidence suggests the investors in our sample have stock-picking skills. A strategy of going long (short) buy (sell) recommendations earns monthly value-weight calendar-time abnormal returns of 1.31% (-2.67%) over the January 1, 2000 to December 31, 2011 sample period. Interestingly, these skilled investors share their profitable ideas. We determine that the managers in our sample share ideas to receive constructive feedback and to attract additional arbitrageur capital to their asset market.
Keywords: Value investing, abnormal returns, networks, hedge funds, market efficiency, Valueinvestorsclub.com, internet message boards
JEL Classification: G10, G11, G14
Suggested Citation: Suggested Citation
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