Thursday, June 01, 2006
Annals of finance: hooked on phonics
Psychologists from Princeton University have shown that initial public offerings (IPOs) for companies with easily pronounced names are doing better than for the ones with awkward names. The same effect affects stock ticker symbols. For example, a stock with the symbol BAL should outperform one with the symbol BDL.
If you are interested in the psychology of markets, read the whole thing. Don't build your retirement strategy around pronounceable ticker symbols, but do marvel at the madness of crowds.
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