Wisdom of crowds: The value of stock opinions transmitted through social media

Review of Financial Studies

Volumn 27, Issue 5, 2014, Pages 1367-1403

  Chen, Hailiang ^a   De, Prabuddha ^b   Hu, Yu ^c   Hwang, Byoung Hyoun ^b  

^a CITY UNIVERSITY OF HONG KONG   (Hong Kong)

^b PURDUE UNIVERSITY   (United States)

^c GEORGIA INSTITUTE OF TECHNOLOGY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84898921248     PISSN: 08939454     EISSN: 14657368     Source Type: Journal    
DOI: 10.1093/rfs/hhu001     Document Type: Article

References (56)

1. Antweiler,W., and M. Z. Frank. 2004. Is all that talk just noise?. The information content of internet stock message boards. Journal of Finance 59:1259-94
2. Barber, B. M., R. Lehavy, M. McNichols, and B. Trueman. 2006. Buys, holds, and sells: The distribution of investment banks' stock ratings and the implications for the profitability of analysts' recommendations. Journal of Accounting and Economics 41:87-117
3. Barber, B. M., and D. Loeffler. 1993. The 'dartboard' column: Second-hand information and price pressure. Journal of Financial and Quantitative Analysis 28:273-84
4. Barber, B. M., and T. Odean. 2000. Trading is hazardous to your wealth: The common stock investment performance of individual investors. Journal of Finance 55:773-806
5. Benartzi, S. 2001. Excessive extrapolation and the allocation of 401(k) accounts to company stock. Journal of Finance 56:1747-64
6. Boehme, R. D., B. R. Danielsen, and S. M. Sorescu. 2006. Short-sale constraints, differences of opinion, and overvaluation. Journal of Financial and Quantitative Analysis 41:455-87
7. Boyd, D. M., and N. B. Ellison. 2007. Social network sites: Definition, history, and scholarship. Journal of Computer-Mediated Communication 13:210-30
8. Busse, J. A., and T. C. Green. 2002. Market efficiency in real time. Journal of Financial Economics 65:415-37
9. Chapman, C. 2009. The history and evolution of social media. Available from: Http://www.webdesignerdepot. com/2009/10/the-history-And-evolution-of- social-media/.
10. Chen, Y., and J. Xie. 2008. Online consumer review: Word-of-mouth as a new element of marketing communication mix. Management Science 54:477-91
11. Chevalier J. A., and D. Mayzlin. 2006. The effect of Word of Mouth on sales: Online book reviews, Journal of Marketing Research 43:345-54
12. Cogent Research. 2008. Social media's impact on personal finance & investing. Available from: Http://www.cogentresearch.com
13. Coval, J. D., and T. Shumway. 2005. Do behavioral biases affect prices?. Journal of Finance 60:1-34
14. Da, Z., J. Engelberg, and P. Gao. 2011. In search of attention. Journal of Finance 66:1461-99
15. Daniel, K., M. Grinblatt, S. Titman, and R. Wermers. 1997. Measuring mutual fund performance with characteristic-based benchmarks. Journal of Finance 52:1035-58
16. Daniel, K., D. Hirshleifer, and S. H. Teoh. 2002. Investor psychology in capital markets: Evidence and policy implications. Journal of Monetary Economics 49:139-209
17. Das, S. R., and M. Y. Chen. 2007. Yahoo! for Amazon: Sentiment extraction from small talk on the web. Management Science 53:1375-88
18. Datamonitor. 2010. Social media in financial services: The customer as the advisor
19. Davis, A. K., J. M. Piger, and L. M. Sedor. 2012. Beyond the numbers: Measuring the information content of earnings press release language. Contemporary Accounting Research 29:845-68
20. Deloitte. 2007. Most consumers read and rely on online reviews; companies must adjust
21. Dougal, C., J. Engelberg, D. Garcia, and C. Parsons. 2012. Journalists and the stock market. Review of Financial Studies 25:639-79
22. Engelberg, J. 2008. Costly information processing: Evidence from earnings announcements. SSRN eLibrary
23. Engelberg, J., and C. A. Parsons. 2011. The causal impact of media in financial markets. Journal of Finance 66:67-97
24. Fang, L., and J. Peress. 2009. Media coverage and the cross-section of stock returns. Journal of Finance 64:2023-52
25. Feng, L., and M. Seasholes. 2004. Correlated trading and location. Journal of Finance 59:2117-44
26. Frieder, L., and J. Zittrain. 2008. Spam works: Evidence from stock touts and corresponding market activity. Hastings Communications & Entertainment Law Journal 30:479-520
27. Gartner. 2010. User survey analysis: Consumer marketing using social network analysis
28. Giannini, R. C. 2011. Twitter: An investigation of the impact of network communication. SSRN eLibrary
29. Griffin, J. M., J. Harris, T. Shu, and S. Topaloglu. 2011. Who drove and burst the tech bubble?. Journal of Finance 66:1251-90
30. Gurun, U. G., and A. W. Butler. 2012. Don't believe the hype: Local media slant, local advertising, and firm value. Journal of Finance 67:561-98
31. Hanke, M., and F. Hauser. 2008. On the effects of stock spam e-mails. Journal of Financial Markets 11:57-83
32. Hirshleifer, D., and S. H. Teoh. 2009. Thought and behavior contagion in capital markets. In Handbook of financial markets: Dynamics and evolution. Eds. T. Hens and K. R. Schenk-Hoppé. Elsevier/North-Holland
33. Hong, H., J.D.Kubik, and J. C. Stein. 2004. Social interaction and stock-market participation. Journal of Finance 59:137-63
34. Huberman, G., and T. Regev. 2001. Contagious speculation and a cure for cancer: A non-event that made stock prices soar. Journal of Finance 56:387-96
35. Ivkovic, Z., and S. Weisbenner. 2007. Information diffusion effects in individual investors' common stock purchases: Covet thy neighbors' investment choices. Review of Financial Studies 20:1327-57
36. Kaniel, R., S. Liu, G. Saar, and S. Titman. 2012. Individual investor trading and return patterns around earnings and announcements. Journal of Finance 67:639-80
37. Kaniel, R., G
38. Kelley, E. K., and P. C. Tetlock. 2013. How wise are crowds?. Insights from retail orders and stock returns. Journal of Finance 68:1229-65
39. Li, F. 2008. Annual report readability, current earnings, and earnings persistence. Journal of Accounting and Economics 45:221-47
40. Liu, Y. 2006.Word of Mouth for movies: Its dynamics and impact on box office revenue. Journal of Marketing 70:74-89
41. Loughran, T., and B. McDonald. 2011. When is a liability not a liability?. Textual analysis, dictionaries, and 10-Ks. Journal of Finance 66:35-65
42. Odean, T. 1998. Are investors reluctant to realize their losses?. Journal of Finance 53:1775-98
43. Richardson, S., I. Tuna, and M.Wu. 2002. Predicting earnings management: The case of earnings restatements. Working Paper, University of Pennsylvania
44. Seasholes, M. 2010. Social interactions and investing. Hoboken, NJ: JohnWiley & Sons, Inc
45. SEC, 2012. Investment adviser use of social media. National Examination Risk Alert 2:1-7
46. Seeking Alpha. 2012. About Seeking Alpha. Available from: Http://seekingalpha.com/page/about-us.
47. Skinner, D. J., and R. G. Sloan. 2002. Earnings surprises, growth expectations, and stock returns. Review of Accounting Studies 7:289-312
48. Solomon, D. H. 2012. Selective publicity and stock prices. Journal of Finance 67:599-638
49. Surowiecki, J. 2005. The wisdom of crowds: Why the many are smarter than the few. New York: Anchor Books
50. Tetlock, P. C. 2007. Giving content to investor sentiment: The role of media in the stock market. Journal of Finance 62:1139-68
51. Tetlock, P. C.,M. Saar-Tsechansky, and S. Macskassy. 2008. More than words: Quantifying language to measure firms' fundamentals. Journal of Finance 63:1437-67
52. Tumarkin, R., and R. F. Whitelaw. 2001. News or noise?. Internet postings and stock prices. Financial Analysts Journal 57:41-51
53. Tyckoson, D., D. Hoffman, P. Kobasa, and P. Ayers. 2011. The Wikipedia effect: How Wikipedia has changed the way the world finds and evaluates information. ALAAnnual Conference and Exhibition
54. White, H. 1980. A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica 48:817-38
55. Womack, K. L. 1996. Do brokerage analysts' recommendations have investment value?. Journal of Finance 51:137-67
56. Zhu, F., and X. M. Zhang. 2010. Impact of online consumer reviews on sales: The moderating role of product and consumer characteristics. Journal of Marketing 74:133-48.