New Paradigm or Same Old Hype in Equity Investing?

The recent relative stock-price performance of six U.S. equity asset classes (classified by size and by value-versus-growth style) differs markedly from the historical pattern. Large-capitalization growth stocks have apparently taken the place of small-capitalization and value stocks in investors�...

Full description

Saved in:
Bibliographic Details
Published in:Financial analysts journal 2000-07, Vol.56 (4), p.23-36
Main Authors: Louis K. C. Chan, Karceski, Jason, Lakonishok, Josef
Format: Article
Language:English
Subjects:
Assets
Behavior
Business structures
Dividends
Earnings
Equity
Financial portfolios
Growth stocks
Hypotheses
Investment
Investment advisors
Investment policy
Investment strategies
Investors
Large cap investments
Mid cap investments
Paradigms
Portfolio Management
Pricing
Profitability
Profits
Sales growth
Securities markets
Small cap investments
Stock exchange
Stock exchanges
Stock prices
Stock returns
Stock sales
Studies
Value
Value stocks
Working capital
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The recent relative stock-price performance of six U.S. equity asset classes (classified by size and by value-versus-growth style) differs markedly from the historical pattern. Large-capitalization growth stocks have apparently taken the place of small-capitalization and value stocks in investors' hearts. Have the size and value premiums of the past vanished for good? We explore three explanations of recent market behavior--the "rational-asset-pricing" hypothesis, the "new-paradigm" viewpoint, and the "behavioral" or "institutional" explanation. In our study, we examined the operating performance of the equity classes to see which hypothesis accounts for the recent behavior of returns. Our findings provide the most support for the behavioral explanation.
ISSN:0015-198X
1938-3312
DOI:10.2469/faj.v56.n4.2371