Smart money, dumb money, and capital market anomalies

Volume: 118, Issue: 2, Pages: 355 - 382
Published: Nov 1, 2015
Abstract
null null We investigate the dual notions that “dumb money” exacerbates well-known stock return anomalies and “smart money” attenuates these anomalies. We find that aggregate flows to mutual funds (dumb money) appear to exacerbate cross-sectional mispricing, particularly for growth, accrual, and momentum anomalies. In contrast, hedge fund flows (smart money) appear to attenuate aggregate mispricing. Our results suggest that aggregate flows to...
Paper Details
Title
Smart money, dumb money, and capital market anomalies
Published Date
Nov 1, 2015
Volume
118
Issue
2
Pages
355 - 382
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