The Neighbor's Portfolio: Word-of-Mouth Effects in the Holdings and Trade of Money Managers

Harrison Hong, Jeffrey D. Kubik and Jeremy Stein

No 9711, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A mutual-fund manager is more likely to hold (or buy, or sell) a particular stock in any quarter if other managers in the same city are holding (or buying, or selling) that same stock. This pattern shows up even when controlling for the distance between the fund manager and the stock in question, so it is distinct from a local-preference effect. It is also robust to a variety of controls for investment styles. These results can be interpreted in terms of an epidemic model in which investors spread information about stocks to one another by word of mouth.

JEL-codes: D83 G11 (search for similar items in EconPapers)
Date: 2003-05
New Economics Papers: this item is included in nep-cfn and nep-geo
Note: AP CF
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published as Hong, Harrison, Jeffrey D. Kubik and Jeremy C. Stein. “Thy Neighbor’s Portfolio: Word-of-Mouth Effects in the Holdings and Trades of Money Managers." Journal of Finance 60 (2005): 2801-2824.

Downloads: (external link)
http://www.nber.org/papers/w9711.pdf (application/pdf)

Related works:
Working Paper: Thy Neighbor's Portfolio: Word-of-Mouth Effects in the Holdings and Trades of Money Managers (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:9711

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w9711

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().