Investing Research Articles

…underperformance of high short interest stocks may be limited to those with high levels of informed (non-arbitrage, non-noise) trading.

…the higher the probability that trading in a stock is informed, the greater the size and persistence of stock price movement.

…short selling shocks move stock prices ipso facto. They are news in and of themselves. In the absence of contrary information or reactive strategies, investors should avoid short-shocked stocks.

…this research suggests that investors should be inclined to sell speculative U.S. stocks in late spring and buy them in the fall.

…reasonably isolated attention-grabbing events are opportunities for profitable day trading.

In his June 2004 paper on “What Are Stock Investors’ Actual Historical Returns”, Ilia Dichev examines stock market capital inflows and outflows to determine how well investors really perform compared to buy-and-hold returns. He concludes that:

In the February 2005 issue of The Financial Review, Burton Malkiel offers “Reflections on the Efficient Market Hypothesis: 30 Years Later” as a pudding-based proof of his famous proposition. He pits the performance of professional investment managers against that of market indices and finds that:

…21st-century investors should curb their exuberance.

…short selling is more effective at buffering exuberance for individual stocks than for the overall market.

…mutual fund inflows naively chase past returns.