The 52-week high and momentum in the Taiwan stock market: Anchoring or recency biases?

Ying, Hao; Chu, Hsiang-Hui; Ho, Keng-Yu; Ko, Kuan‐Cheng

doi:10.1016/j.iref.2015.10.035

Cited by 31 publications

(17 citation statements)

References 36 publications

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“…The biased method of portfolio formation is 52 weeks high because the rating is based on the highest price ratio. 52 week high is better known as 52 weeks high momentum (Bornholt & Malin, 2011;Hao et al, 2016Hao et al, , 2018. Recent research has found that a 52-week high can be used as a target price (Clarkson et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

“…Research in Indonesia on sentiment is conducted using proxies other than market information, so sentiment research with market data is necessary to enrich empirical evidence about sentiment Empirical evidence of 52-week highs is more done in developed countries or countries with high liquidity financial markets, such as the United States, Taiwan, etc. (Chang et al, 2016;Hao et al, 2016Hao et al, , 2018Montgomery et al, 2019). 52 week high in the developed market and countries with high liquidity always gives profit with momentum (George et al, 2018;Lee & Piqueira, 2019).…”

Section: Introductionmentioning

confidence: 99%

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Investment Strategy Based on Bias Behavior and Investor Sentiment in Emerging Markets

et al. 2022

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This research's main objective is to select profitable investment strategies with the presence of sentiment investors in emerging markets, with behavior bias-based portfolio methods. The sample of 114 companies traded daily on IDX was conducted over three years with weekly data. This study uses pairwise comparison and OLS. The research results show that contrarian strategies are more profitable than momentum. Investors benefit when mild conditions are optimistic and more significant when the conditions are pessimistic. This research proves that investor sentiment in the market can distort investor investment decisions, even using the behavior-bias method. Therefore, forming a portfolio will be more appropriate based on biased behavior because it facilitates investment decision-making.How to Cite:Koesoemasari, D.S.P., Haryono, T., Trinugroho, I., Setiawan, D. (2022). Investment Strategy Based on Bias and Investor Sentiment in Ememerging Market. Etikonomi, 21(1), 1-10. https://doi.org/10.15408/etk.v21i1.22290.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Investment Strategy Based on Bias Behavior and Investor Sentiment in Emerging Markets

et al. 2022

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“…In contrast, although we report similar trading behavior, insiders' trades are to good news and highlighting the need to differentiate recency from anchoring bias. However, Hao et al (2016) show that these two biases coexist, and that the 52-week high momentum trading strategy dominates the recency strategy. 4 Other studies expand encoring bias.…”

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confidence: 87%

Corporate insiders’ exploitation of investors’ anchoring bias at the 52‐week high and low

Lasfer,

2023

The Financial Review

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We find that insiders adopt dissimulation strategies to conceal their informational advantage and trade profitably when their firms’ stock prices reach 52‐week highs and lows, exploiting the anchoring biases of uninformed investors. Insiders’ trading profitability depends on their firms’ future stock returns, operating efficiency, and investment sentiment, but not on earnings surprises. We document that male board members and insiders with long investment horizons are more likely to use dissimulation strategies. Overall, we provide evidence that insiders benefit from these price extremes, despite their status as publicly available, irrelevant, historical price levels that normally should not predict future stock returns.

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“…Hong et al (2015) analyzed the profitability of 52-week high strategy in NYSE, AMEX, and NASDAQ between 1963 to 2009, and attained 0.43% premium per month. Hao et al (2016) documented the profitability of 52week high strategy in Taiwan stock market, and showed that January months have a negative impact on returns. A multitude of research has been conducted on 52-week high in markets as well (Huddart et al, 2009;Li and Yu, 2012;Bhootra and Hur, 2013;George et al, 2015;Chang, 2019).…”

Section: Literaturementioning

confidence: 99%

Gross Profitability and 52-Week High Price

Özkan

2021

Mehmet Akif Ersoy Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi

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The purpose of the study is to measure the conjoint effect of investment strategy based on gross profitability and 52-week high in Borsa İstanbul for the period 2007-2016. The strategy suggests the investors can profit when they take a long position on stocks with high gross profitability and 52-week high, and short position on stocks with low gross profitability and 52-week high. The portfolio method is used in the analysis. The portfolios sorted on 52-week high provide premium but statistically insignificant whereas gross profitability premium is found positively significant. Besides that, the seasonality of profitability returns is observed, though it is weak. When the strategies are analyzed together, the findings exhibit no superior performance of combined strategy despite of positive premium. It may stem from 52-week high effect that is employed as an alternative measure of momentum. This study exhibits a new evidence in the context of the joint effect of strategies. It's considered that forthcoming researches might focus on the combined performances of the other strategies also by employing alternative measures.

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The 52-week high and momentum in the Taiwan stock market: Anchoring or recency biases?

Cited by 31 publications

References 36 publications

Investment Strategy Based on Bias Behavior and Investor Sentiment in Emerging Markets

Investment Strategy Based on Bias Behavior and Investor Sentiment in Emerging Markets

Corporate insiders’ exploitation of investors’ anchoring bias at the 52‐week high and low

Gross Profitability and 52-Week High Price

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