Should one Believe in Stock-Nostradamus?
Autor: rita • November 18, 2011 • Essay • 470 Words (2 Pages) • 1,327 Views
Abstract
Title Should one believe in stock-Nostradamus?
Seminar date 10 January, 2011
Course Bachelor Thesis in Finance, 15 Swedish Credits
Authour Derya Nourmohammadi
Advisor Maria Smolander
Examinator Curt Scheutz
Keywords Efficient markets, passive investment strategies, stock recomendation
Intro Sweden is today the worlds leading country in private possessing of securities. There are a lot of different ways of saving money and it can be hard for a private investor to know which security to invest in and when to invest. The strategies are as ambivalent as the stock markets fluctuations. For the investors who do not themselves want to actively invest there are brokers who they can pay to do the investments for them. The brokers use difficult and complicated calculations and analytical tools to reach the best investment strategies. They analyze historical data based on public information. According to the efficient market hypothesis it is not possible to make exessive returns on investments that are based on publically avaible information.
Purpose The study aims to explain if stock recommendations published in a business newspaper has any value for investors who want to generate high returns.
Methodology Since the data is kvantitative, a deduktiv method will be used to comprehend the results. Investments will be made in two fictive portfolios where in one a passive investment strategy is made and in the other an active investment strategy. A one sample t-test was also used to obtain the statistics for answering the hypothetical questions that are asked in the paper.
Theoretical The essay deals primarily with the theory of efficient market hypothesis, but perspectives also passive investment strategies and the random walk hypothesis. Theories
against the efficient market hypothesis is also being discussed.
Empirical I have conducted a study of recomendations with the recomendations found in foundations DI.se between 2005-01-01 and 2006-12-31, as the study objects. The primary
sources have been DI.se and the Nasdac OMX. The results that have been
conducted
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