I have done too much on Money Terms recently to list it all here, but a few high lights are worth mentioning. I learnt a lot writing the piece on the value effect: it needed a fair amount of research on the evidence for it. The same goes for the dumb money effect. This was less true for the size effect which I have been interested in for a while. Having looked at the evidence, I think now think the dumb money effect is the most interesting of these.
For begginers, I have added a few basic comments on year-on-year and sequential comparisons. Also fairly basic, but quite interesting to think about, was corporate social responsibility.
Hi Graeme. On the ‘dumb money effect’. It has a corollary – ‘the new fund effect’ perhaps. I’d define that as the the propensity of fund managers to launch new funds in hyped sectors in order to capture the dumb money effect. Internet funds in the dot.com booms, infrastructure funds now… Which raises the question. Who’s really behind the dumb money effect? The individuals who own them, or the fund management houses and IFA’s that foist them on individual investors!
I think its fair to blame both, and the media as well (sorry!). The fund managers for launching the funds, the media for hyping “hot” sectors, and the IFAs and private investors for falling for the hype through greed.