When a stock that has risen in the past continues to rise, we call it momentum. Momentum is a bit of a problem for the Efficient Market Hypothesis because it implies a profitable trading rule - "buy recent winners".
Recent academic studies have found support for momentum effects even after controlling for risk, data mining biases and trading costs. The Economist has a really nice article on the current state of what we know about momentum. Well worth a read.
A Finance Professor's blog. I am a Professor of Finance in the Poole College of Management at NC State University. My website: https://sites.google.com/ncsu.edu/warr Opinions are my own.
Subscribe to:
Post Comments (Atom)
What's going on with inflation?
I recently posted an article on the Poole College Thought Leadership page titled: " What's going on with inflation?" . This w...
-
A recent paper by some computer science folks at Indiana finds that the mood on twitter can predict movements in the Dow Jones Industrial A...
-
It's not often that you can see a financial market in action in real time. Check out the Arca ECN . (Be sure to click on the java book...
-
I recently posted an article on the Poole College Thought Leadership page titled: " What's going on with inflation?" . This w...
No comments:
Post a Comment