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To: pyslent who wrote (170722)	6/10/2014 11:05:33 AM
From: Doren	1 Recommendation Recommended By Zen Dollar Round Read Replies (2) \| Respond to of 213176

Yes. Like I said they wouldn't go to the bother to split unless their math told them that it would make money. There is a portion of the population like the pizza guy on the phone who just don't get math. "How big is it?" "Eight pieces." I used to live in South Lake Tahoe. Its amazing how many broke people told me they "win" all the time in the casinos. Who do they think built the casinos. Some people, a significant portion of the population, have conceptual difficulties with things like P/Es, fractional ratios etc. They won't buy a stock with a large price all that other math stuff doesn't mean anything to them. Hence when the price comes down they think its cheaper.

To: pyslent who wrote (170722)	6/10/2014 11:16:20 AM
From: Ryan Bartholomew	Read Replies (1) \| Respond to of 213176

Here's a 1996 study in which this was the case 1996 and 2003 follow-up, not within the past decade. The "significant" outperformance was that if the broader market rose 10.0%, the control group of splitters rose 10.8%. And an even smaller difference over three years. How much of the deviation could be explained by random variation from the sample size? Remember - it's quite easy to pick out, say 100 stocks with particular bullish variables, and find similar outperformance in hindsight. When you find such samples, even if you test and re-test and are able to replicate, the phenomena tends to go away over time (especially the past few years) as information sharing of such trends allows algorithms to price in such expectations more readily. The bottom line: If you truly believe that old and small correlations (not causation) are statistically significant and will repeat, then just take a position in all splitting stocks, hedge verses broader market movement, and profit from the spread. Easy money, right?