We document positive (negative) abnormal returns and volume associated with long (short) recommen... more We document positive (negative) abnormal returns and volume associated with long (short) recommendations published in The Wall Street Journal's Smart Money Stock Screen. Even though the recommendations are free, long positions have a cumulative abnormal return of 1.17% and the short recommendations have a cumulative abnormal return of -5.85% return. Our results are consistent with previous research, regarding the initial price reaction to a daily news event. Unlike most previous research, our results indicate a more permanent price change.
The relaxation of the Glass-Steagall Act (GSA), the Act which separates commercial and investment... more The relaxation of the Glass-Steagall Act (GSA), the Act which separates commercial and investment banking, is currently under debate. Central to this debate is the potential risk reduction of commercial banks due to diversification. This paper, through a thorough and complete examination of the diversification potential, establishes an upper bound of diversification benefits. The results do support a relaxation of the GSA as well as the allowable amount of investment banking and other securities activities by commercial banks.
Abstract: The recent trend toward debt exchange offers (or debt restructuring) instead of filing ... more Abstract: The recent trend toward debt exchange offers (or debt restructuring) instead of filing for bankruptcy may be a natural consequence of the great increase in high-yield bond issues since the early 1980s. Debt restructuring can give a company time to get back on track ...
This study reports on the existence of a curious calendar effect--a relationship between stock ma... more This study reports on the existence of a curious calendar effect--a relationship between stock market performance and the schedule of the U.S. Congress. Almost the entire advance in the market since 1897 corresponds to the periods when Congress is in recess. This is an impressive result, given that Congress is in recess about half as long as in sesskm. Furthermore, average daily returns when Congress is not meeting are almost thirteen times greater than when Congress is in session. Throughout the year, cumulative returns during recess are eight times that experienced while Congress is in session.
We document positive (negative) abnormal returns and volume associated with long (short) recommen... more We document positive (negative) abnormal returns and volume associated with long (short) recommendations published in The Wall Street Journal's Smart Money Stock Screen. Even though the recommendations are free, long positions have a cumulative abnormal return of 1.17% and the short recommendations have a cumulative abnormal return of -5.85% return. Our results are consistent with previous research, regarding the initial price reaction to a daily news event. Unlike most previous research, our results indicate a more permanent price change.
The relaxation of the Glass-Steagall Act (GSA), the Act which separates commercial and investment... more The relaxation of the Glass-Steagall Act (GSA), the Act which separates commercial and investment banking, is currently under debate. Central to this debate is the potential risk reduction of commercial banks due to diversification. This paper, through a thorough and complete examination of the diversification potential, establishes an upper bound of diversification benefits. The results do support a relaxation of the GSA as well as the allowable amount of investment banking and other securities activities by commercial banks.
Abstract: The recent trend toward debt exchange offers (or debt restructuring) instead of filing ... more Abstract: The recent trend toward debt exchange offers (or debt restructuring) instead of filing for bankruptcy may be a natural consequence of the great increase in high-yield bond issues since the early 1980s. Debt restructuring can give a company time to get back on track ...
This study reports on the existence of a curious calendar effect--a relationship between stock ma... more This study reports on the existence of a curious calendar effect--a relationship between stock market performance and the schedule of the U.S. Congress. Almost the entire advance in the market since 1897 corresponds to the periods when Congress is in recess. This is an impressive result, given that Congress is in recess about half as long as in sesskm. Furthermore, average daily returns when Congress is not meeting are almost thirteen times greater than when Congress is in session. Throughout the year, cumulative returns during recess are eight times that experienced while Congress is in session.
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