Investor inattention and the underreaction to stock recommendations

• Main Author: LOH, Roger
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2010
• Subjects: Underreaction; Investor Attention; Security Analysts; Stock Recommendations; Portfolio and Security Analysis
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/3031; https://ink.library.smu.edu.sg/context/lkcsb_research/article/4030/viewcontent/SSRN_id1089773.pdf
• Institution: Singapore Management University

Investors’ reaction to stock recommendations is often incomplete so that there is a predictable post-recommendation drift. I investigate investor inattention as a plausible explanation for this drift by using prior turnover as a proxy for attention. I find that low attention stocks react less to sto...