Sunday, July 09, 2006

Simple Names and the Stock Market

Not a result that will please some businessmen, but it seems that there is statistical evidence that companies with simpler names and/or companies with simple stock ticker symbols perform better on the market. Human processing may be the reason. Note, however, that it's not a sole predictor -- TiVO would have done better long term if it were, sigh.
In fact, across the entire NYSE and AMEX markets, Alter and Oppenheimer calculated $1000 invested in shares with pronounceable ticker codes would have netted $85.35 more profit after one day compared with an equal amount invested in companies with an unpronounceable ticker code.
Citation: BPS Research Digest: Why you should invest in shares with simple names.

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