Who knew? I've been spending the better part of a decade focused on cash flow statements, balance sheets, income statements, industry due diligence, sales checks, market internals and the occasional technical indicators and all I really needed to do in order to be the next mega-investor was K.I.S.S. (Keep It Simple Stupid).
The latest entry into the "I Can't Believe Someone Funded That Study Department"...two psychologists from Princeton University have determined that fluency of a company's name was highly correlated with a stock's performance.
To check, Alter and Oppenheimer did a second study looking at 89 real stocks that were traded on the New York exchange between 1990 and 2004. They asked 16 undergraduates to grade the fluency of the stock names on a sliding scale. Then they checked on the stocks' performance.
As anticipated, the more complex a share's name, the poorer it performed on the first day of trading. The effect appeared to wane as time went on; after 6 months, when more information about the stock was presumably available, the name alone couldn't be used to predict a single stock's performance.
Hmmm, so why we're all wondering what James Simons and T. Boone Pickens have that we don't; I wouldn't have expected it to be a preference for monosyllabic company names. :)