STREET DOGS: Behind the hype
Why hedge fund managers are willing to share their best ideas
From Sarah Ponczek at Bloomberg: Ever wonder why hedge fund managers are so willing to get up on a stage and tell the world about their best ideas? A new study suggests an answer: the ideas are getting old and need a spot to sell. The research pertains to what is by now a familiar ritual. A few times a year, famous investors crowd a conference hall and publicly discuss the companies they like. What they leave out is that starting roughly then, they are much more apt to sell the stock than load up on more. Not that it’s a crime against humanity, exactly. Propelled by the buzz, pitched stocks tend to keep on rising after being mentioned on stage, sometimes for months, according to Patrick Luo, the Harvard doctoral student who published the study. But it does answer a question that has vexed outsiders: if the ideas are so good, why tell anyone? "Hedge funds take advantage of the publicity of these conferences and strategically release their book information to drive market demand," say...
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