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The value of SmartMoney's stock recommendations

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  • Richard Borghesi
  • Thomas Pencek

Abstract

We examine the value of expert picks published by SmartMoney, a popular investment periodical. Most can be described as 'hot' stocks - those that have experienced run-ups in price before publication. However, these stocks subsequently underperform the market by 0.45% per month in the 6-month post-publication period. We also observe that market risk-adjusted abnormal returns (AR) are -1.18% per month over the same time period, which is significantly below expectations. Results suggest SmartMoney's recommendations have negative value to its subscribers.

Suggested Citation

  • Richard Borghesi & Thomas Pencek, 2011. "The value of SmartMoney's stock recommendations," Applied Economics Letters, Taylor & Francis Journals, vol. 18(10), pages 949-953.
    • Handle: RePEc:taf:apeclt:v:18:y:2011:i:10:p:949-953
    DOI: 10.1080/13504851.2010.518946
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    References listed on IDEAS

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