“Contagious Investment Ideas” by Dr. Byoung-Hyoun Hwang
Dr. Byoung-Hyoun Hwang
Associate Professor of Finance
We utilize server log data from one of the most popular investment-related websites to study what types of content investors enjoy (or dislike) talking about with other investors. Our data reveal how often a stock-opinion article was viewed, how often it was read-to-end and how often it was shared via email. We find that while negative or emotional content attracts greater investor attention, such content is shared substantially less. Investors enjoy sharing investment ideas on stocks residing in the short leg of anomalies, yet avoid sharing ideas on long-leg stocks. Additional analyses suggest that this helps explain why the former (latter) tend to overpriced (underpriced). Overall, our results suggest that – in communicating with peers – investors have strong preferences towards and against certain types of content and we provide preliminary evidence that such “social preferences” help explain basic patterns in the stock market.