Theoretical models predict that overcon�dent investors trade excessively. We test this prediction by partitioning investors on gender. Psychological research demonstrates that, in areas such as �nance, men are more overcon�dent than women. Thus, theory predicts that men will trade more excessively than women. Using account data for over 35,000 households from a large discount brokerage, we analyze the common stock investments of men and women from February 1991 through January 1997. We document that men trade 45 percent more than women. Trading reduces men’s net returns by 2.65 percentage points a year as opposed to 1.72 percentage points for women. It’s not what a man don’t know that makes him a fool, but what he does know that ain’t so. Josh Billings, nineteenth century American humorist It is dif�cult to reconcile the volume of trading observed in equity markets with the trading needs of rational investors. Rational investors make periodic contributions and withdrawals

As previous agency models have shown, fund managers with career concerns have an incentive to imitate the recent trading strategy of other managers. We embed this rational conformist tendency in a stylized financial market with limited arbitrage. Equilibrium prices incorporate a reputational premium or discount, which is a monotonic function of past trade between careerdrive traders and the rest of the market. Our prediction is tested with quarterly data on US institutional holdings from 1983 to 2004. We find evidence that stocks that have been persistently bought (sold) by insitutions in the past 3 to 5 quarters underperform (overperform) the rest of the market in the next 12 to 30 months. Our result is of a similar order of magnitude of — but cannot be reconduced to — other known price anomalies. Our findings challenge the mainstream view of the roles played by individuals and institutions in generating price anomalies.

The agency story is that some money managers prefer investing their clients ' assets in well-regarded companies so that if the stock performs poorly the clients will blame the company or the stock market, but not the advisor. If enough people are willing to sacrifice returns when they invest in excellent companies, these investments will earn negative abnormal returns in equilibrium. Another reason to suspect that shares of well-regarded firms may be overvalued and shares of poorly regarded firms undervalued is that stock prices appear to overreact in some contexts. The most-admired decile of firms, as ranked by Fortune magazine's survey of America's Most Admired Companies in years 1982-1995, significantly outperforms the least-admired decile. In the five years after the survey was published, the most-admired decile earned an average annual return of 17.7 % compared to 12.5 % for the leastadmired decile. This result is surprising because the most-admired firms tend to be larger and have a higher market-to-book ratio. Full Text: Copyright Euromoney Institutional Investor PLC Spring 2003 Are the returns to investing in highly regarded firms commensurate with firm riskiness, or are they abnormally high or low? Each possibility has its proponents. Believers in market efficiency would argue that shares of well-regarded firms cannot on average realize abnormal returns. Because these are

their comments.

JEL No. J01,J08,J5,J51 We estimate the effect of new unionization on firms ' equity value over the 1961-1999 period using a newly assembled sample of National Labor Relations Board (NLRB) representation elections matched to stock market data. Event-study estimates show an average union effect on the equity value of the firm equivalent to a cost of at least $40,500 per unionized worker. At the same time, point estimates from a regression-discontinuity design-- comparing the stock market impact of close union election wins to close losses-- are considerably smaller and close to zero. We find a negative relationship between the cumulative abnormal returns and the vote share in support of the union, allowing us to reconcile these seemingly contradictory findings. Using the magnitudes from the analysis, we calibrate a structural "median voter " model of endogenous union determination in order to conduct counterfactual policy

Association Meeting in Miami Beach for their comments. Long-Run Performance and Insider Trading in Completed and Canceled Seasoned Equity Offerings This paper provides evidence on managerial motives for raising equity by examining long-run performance and insider trading around canceled and completed seasoned equity offerings (SEOs). Insider selling increases prior to completed and canceled SEOs, but declines afterward only for canceled offerings. For completed SEOs, pre-filing insider trading is related to long-run performance after completion. For canceled SEOs, pre-filing insider trading is related to stock performance between filing and cancellation. Finally, changes in insider trading around SEO filing effect the probability of cancellation. Overall, the evidence is consistent with insiders exploiting windows of opportunity by attempting to issue overvalued equity, and cancelling the issue when the market reaction to the announcement eliminates the overvaluation