Don, thanks for the tables! In your absence we decided you should start a web site. :) Some unrelated tidbits...
Look who underperformed AMAT for a decade finance.yahoo.com
...and BW on the "dumb investor" effect
businessweek.com
excerpt
High volumes of trading, narrow bid-ask spreads, and other measures of liquidity are generally seen as signs of a healthy stock market. But evidence has mounted in recent years that periods of high liquidity are usually followed by periods of poor returns, both for individual stocks and the whole market.
Harvard Business School professor Malcolm Baker and Harvard University economist Jeremy C. Stein think they have found the culprit: "dumb investors." In a new National Bureau of Economic Research paper, they say the extra liquidity is provided by irrational investors who drive prices unsustainably high. During buying frenzies, such as the Internet stock bubble of the late 1990s, it's as if "the inmates have taken over the asylum," the authors write. Liquidity rises when dumb investors are active because they ignore subtle market signals that other investors heed, and thus they are happy to buy when others are selling. Dumb investors can also be overly pessimistic, the authors say, and then they simply withdraw, reducing liquidity.
The "dumb investor" effect is not small. The authors calculate that when the turnover of shares is 12% higher than its long-term average, stock returns in the following year are 4% below their long-term average.[snip]
not terribly profound.
Gottfried |
