Thy neighbor's portfolio: Word-of-mouth effects in the holdings and trades of money managers

Harrison Hong; Jeffrey D. Kubik; Jeremy C. Stein

doi:10.1111/j.1540-6261.2005.00817.x

Thy neighbor's portfolio: Word-of-mouth effects in the holdings and trades of money managers

Harrison Hong, Jeffrey D. Kubik, Jeremy C. Stein

Department of Economics

Research output: Contribution to journal › Article › peer-review

456 Scopus citations

Abstract

A mutual fund manager is more likely to buy (or sell) a particular stock in any quarter if other managers in the same city are buying (or selling) that same stock. This pattern shows up even when the fund manager and the stock in question are located far apart, so it is distinct from anything having to do with local preference. The evidence can be interpreted in terms of an epidemic model in which investors spread information about stocks to one another by word of mouth.

Original language	English (US)
Pages (from-to)	2801-2824
Number of pages	24
Journal	Journal of Finance
Volume	60
Issue number	6
DOIs	https://doi.org/10.1111/j.1540-6261.2005.00817.x
State	Published - Dec 2005

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics

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10.1111/j.1540-6261.2005.00817.x

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Thy neighbor's portfolio: Word-of-mouth effects in the holdings and trades of money managers

Abstract

ASJC Scopus subject areas

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