I examine how media coverage of good and bad corporate news affects stock prices, by studying the effect of investor relations (IR) firms. I find that IR firms "spin" their clients' news, generating ...more media coverage of positive press releases than negative press releases. This spin increases announcement returns. Around earnings announcements, however, IR firms cannot spin the news and their clients' returns are significantly lower. This pattern is consistent with positive media coverage increasing investor expectations, creating disappointment around hard information. Using reporter connections and geographical links, I argue that IR firms causally affect both media coverage and returns.
We show that media coverage of mutual fund holdings affects how investors allocate money across funds. Fund holdings with high past returns attract extra flows, but only if these stocks were recently ...featured in the media. In contrast, holdings that were not covered in major newspapers do not affect flows. We present evidence that media coverage tends to contribute to investors׳ chasing of past returns rather than facilitate the processing of useful information in fund portfolios. Our evidence suggests that media coverage can exacerbate investor biases and that it is the primary mechanism that makes fund window dressing effective.
We analyze brokerage data and an experiment to test a cognitive dissonance based theory of trading: investors avoid realizing losses because they dislike admitting that past purchases were mistakes, ...but delegation reverses this effect by allowing the investor to blame the manager instead. Using individual trading data, we show that the disposition effect—the propensity to realize past gains more than past losses—applies only to nondelegated assets like individual stocks; delegated assets, like mutual funds, exhibit a robust reverse-disposition effect. In an experiment, we show that increasing investors' cognitive dissonance results in both a larger disposition effect in stocks and a larger reverse-disposition effect in funds. Additionally, increasing the salience of delegation increases the reverse-disposition effect in funds. Cognitive dissonance provides a unified explanation for apparently contradictory investor behavior across asset classes and has implications for personal investment decisions, mutual fund management, and intermediation.
The Dividend Disconnect HARTZMARK, SAMUEL M.; SOLOMON, DAVID H.
The Journal of finance (New York),
10/2019, Volume:
74, Issue:
5
Journal Article
Peer reviewed
Many individual investors, mutual funds, and institutions trade as if dividends and capital gains are disconnected attributes, not fully appreciating that dividends result in price decreases. ...Behavioral trading patterns (e.g., the disposition effect) are driven by price changes instead of total returns. Investors rarely reinvest dividends, and trade as if dividends are a separate, stable income stream. Analysts fail to account for the effect of dividends on price, leading to optimistic price forecasts for dividend-paying stocks. Demand for dividends is systematically higher in periods of low interest rates and poor market performance, leading to lower returns for dividendpaying stocks.
Individuals reporting chronic, nonmalignant pain for at least 6 months (N=114) were randomly assigned to 8 weekly group sessions of acceptance and commitment therapy (ACT) or cognitive-behavioral ...therapy (CBT) after a 4-6 week pretreatment period and were assessed after treatment and at 6-month follow-up. The protocols were designed for use in a primary care rather than specialty pain clinic setting. All participants remained stable on other pain and mood treatments over the course of the intervention. ACT participants improved on pain interference, depression, and pain-related anxiety; there were no significant differences in improvement between the treatment conditions on any outcome variables. Although there were no differences in attrition between the groups, ACT participants who completed treatment reported significantly higher levels of satisfaction than did CBT participants. These findings suggest that ACT is an effective and acceptable adjunct intervention for patients with chronic pain.
Elastin-like polypeptides (ELP), an increasingly popular tag for protein purification, commonly rely upon inverse transition cycling (ITC) to exploit their lower critical solution temperature ...characteristics for purification. While considerably faster than chromatography, ITC is still time consuming and often fails to remove host cell contaminants to an acceptable level for in vivo experiments. Here, we present a rapid purification workflow for ELP of broadly varying molecular weight and sequence using a polar organic solvent extraction and precipitation strategy. Four different ELP purification methods were directly compared for their ability to remove host cell protein, nucleic acids, and lipopolysaccharide (LPS) contaminants using a model ELP. On the basis of these findings, an optimized extraction-precipitation method was developed that gave highly pure ELP from bacterial pellets in approximately 2.5 h while removing major host cell contaminants, including LPS to levels below 1 EU/mL, to produce highly pure material that is suitable for in vivo applications. Application of this method to the rapid purification of an ELP-epidermal growth factor fusion gave an isolate that retained its capacity to bind to epidermal growth factor receptor positive cells, thereby demonstrating that this method is capable of producing a functional construct after purification by organic extraction-precipitation.
Rolling Mental Accounts Frydman, Cary; Hartzmark, Samuel M.; Solomon, David H.
The Review of financial studies,
01/2018, Volume:
31, Issue:
1
Journal Article
Peer reviewed
When investors sell one asset and quickly buy another (“reinvestment days”), their trades suggest the original mental account is not closed, but is instead rolled into the new asset. Retail investors ...trading on their own accounts display a rolled disposition effect, selling the new position when its value exceeds the initial investment in the original position. On reinvestment days, these investors display no disposition effect (consistent with no disutility from realizing a loss) and make better selling decisions. Using a laboratory experiment, we show that reinvestment causally reduces the disposition effect and improves trading.
More security: The world's first banknote printed on clear plastic film and using optically variable devices (OVDs) was issued in Australia in 1988 (see picture) after twenty years of research and ...development. In the course of this, a great deal of technical as well as logistic issues had to be solved. Shown is the Australian Bicentennial $10 note released in 1988.
While corporate social responsibility by firms aims at improving welfare for different social groups, whether it achieves this is often difficult to measure. After Apr. 2018 protests, Starbucks ...enacted policies that anybody could sit in their stores and use the bathroom without making a purchase. Using anonymized cellphone location data, we estimate this led to a 7.0% decline in attendance relative to other nearby coffee shops. The effect is 84% larger near homeless shelters and larger for Starbucks’ wealthier customers. The average time spent per visit declined by 4.1%. Public urination citations decreased near Starbucks locations, but other minor crimes were unchanged.
