tut@sun.uucp (Bill Tuthill) (02/01/86)
Not long ago, the Institute for Econometric Research did a study of stock picks by Foster Winans (the one accused by the SEC of divulging insider information) and Gary Putka, who together used to write the Wall Street Journal's "Heard on the Street" column. The institute concluded that these two men picked stocks that outperformed the market as a whole by about 45%, which is extraordinary. On the other hand, they concluded that "stock recommendations made by guests on Louis Rukeyser's "Wall Street Week" television program not only revealed no predictive ability by those guests, but even suggested that information pertaining to stocks recommended on the show may have been used by certain parties in advance, as judged by an upward trend of the stock prices in the two weeks before the show's airing." Foster Winans was fired by the WSJ, and Gary Putka was promoted to the London office. The current writers of "Heard on the Street" don't have nearly as good a record as those two did. Bill Tuthill
suhre@trwrba.UUCP (Maurice E. Suhre) (02/03/86)
In article <3207@sun.uucp> tut@sun.uucp (Bill Tuthill) writes: > >On the other hand, they concluded that "stock recommendations made >by guests on Louis Rukeyser's "Wall Street Week" television program >not only revealed no predictive ability by those guests, but even >suggested that information pertaining to stocks recommended on the >show may have been used by certain parties in advance, as judged by >an upward trend of the stock prices in the two weeks before the >show's airing." > There was a minor flap about just that. The argument was the some people were getting the WSW guest list, finding what their favorite stocks were, and buying them prior to the appearance. The Barron's published a short article which had studied the phenomenon. Yes, there was a slight rise before the program's appearance followed by a later decline to about previous levels. However, the *average* rise was only about *one* per cent. Hardly the sort of thing someone could make a killing by using as a basis for investing (gambling?). Brokerage commissions would almost surely eat up a 1% profit. Maurice {decvax,sdcrdcf,ihnp4,ucbvax}!trwrb!suhre