Okke
Questions#
Tot nu toe heb ik telkens de relatie tussen de Alphabet Bias en Stock Price Crash Risk besproken. Nu kwam ik er echter achter dat de relatie tussen de Alphabet Bias en Risk (of volatility) überhaupt nog niet onderzocht is. Dit lijkt mij eigenlijk leuker en interessanter om te onderzoeken
This seems OK with me. The approach is more general, so if you don’t find any results, you can always focus on the particular case of stock price crash risk, which is more subjective and less explicitly defined in the literature. It seems nice to add on the determinants of risk - but you have to review a lot of literature: what kind of risk? Systematic or unsystematic? Managerial determinants, more structural determinants?
Verder zit ik eraan te denken om wat dieper in te gaan op hoe eigenaarschap verschil afhankelijk van de alfabetische positie van aandelen. Tot nu toe ben ik er namelijk vanuit gegaan dat aandelen die hoger op de alfabetische rangorde staan proportioneel vaker verhandeld worden door onervaren handelen. Echter, dit zou ik kunnen kwantificeren door te kijken naar leeftijd en/of 13F fillings. Hopelijk kunnen we dit dinsdag even bespreken.
I don’t understand (yet) what you mean. What exactly do you want to quantify? And whose age?
Introduction#
The introduction is very nice, but in my opinion, you can mention/explain a few more cases of alphabet bias and the possible mechanism at work behind it before characterizing investors as irrational. In particular, if you mention more examples, the reader might get a better idea of the subject, so that the bias is likely to be very general.
Where Greenwood and Nigel (2008) take age as a proxy for investor experience, Itzkowitz, Itzkowitz and Rothbort (2016) look at type of ownership. They used data from the SEC, that requires investors who have discretion over a budget of $100 million or more to report their stock holdings in quarterly 13F fillings. They imply that any investor that has discretion over this type of budget must be an expert. Any investor that doesn’t meet this threshold is therefore by definition not an expert.
How can you measure investor age of all investors in a stock? Explain this in depth.
(H2) Does the alphabet bias still exist?
How is this a sub-hypothesis?
Also, structure: it makes sense to first explain the alphabet bias and then pose the question whether it still exists, rather than the other way around.
A missing “chain” in your review right now is the relationship between investors who are (are not) prone to alphabet bias and their risk preferences/attitudes: why would stocks dominated by alphabet-biased investors have a different volatility pattern, ceteris paribus, than other stocks?
- Methodology / data not thought out yet