Do noise traders influence stock prices?

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Title: Do noise traders influence stock prices?
Authors: Kelly, Morgan
Permanent link: http://hdl.handle.net/10197/520
Date: Aug-1997
Abstract: This paper tests a smart money-noise trader model directly by comparing its predictions with the behavior of actual investors. It assumes that individual probability of being a noise trader is diminishing in income, high-income households are smart money, lower-income households are noise traders with passive investors in between. Market data behave as predicted: high participation by the general population is a negative predictor of one-year returns, and is associated with law participation by very high-income groups. The implications for the equity premium puzzle of the low returns earned by noise traders are discussed.
Type of material: Journal Article
Publisher: Blackwell
Copyright (published version): Copyright 1997 by The Ohio State University Press
Keywords: Stocks--pricesInvestment analysisFinancial performanceStock exchanges & current events
Subject LCSH: Capitalists and financiers
Individual investors
Rate of return
Language: en
Status of Item: Peer reviewed
Appears in Collections:Economics Research Collection

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