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Influential investors in online stock forums

Lucy Ackert (), Lei Jiang, Hoan Soo Lee and Jie Liu

International Review of Financial Analysis, 2016, vol. 45, issue C, 39-46

Abstract: This paper uses data from an online stock forum to examine the behavior of influential investors, posters who are popular among forum members. Unlike prior research, we find that influential investors post messages based on information and target actively traded large firms. Their predictions are more likely to indicate subsequent returns, as compared to other investors. Influential investors exhibit a preference for local investments and, furthermore, their predictions for local firms are more likely to be correct, suggesting a true information advantage. Thus, these investors contribute to the overall functioning of the market by providing insight into targeted companies.

Keywords: Influential investor; Information advantage; Home equity bias (search for similar items in EconPapers)
Date: 2016
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