The 'Hot Issue' Market of 1980
Article Abstract:
The 'hot issue' market of 1980 is defined as a fifteen- month period, beginning in January, 1980. During this time, the mean return on initial public offerings of common stock was 48.4 percent. The average return for the remainder of the six-year period from 1977-1982 was 16.3 percent. Rock's theory of underpricing of initial public offerings is utilized in the investigation of causes of the 'hot issue' market. Since results show that the 'hot issue' market was almost exclusively restricted to natural resource issues, Rock's theory is an unsatisfactory explanation. The institutional lag hypothesis, speculative bubble hypothesis and monopsony power hypothesis are advanced as alternative explanations of the high average returns for natural resource issues. Implications of the conclusions for buyers and issuers are discussed.
Publication Name: The Journal of Business
Subject: Business, general
ISSN: 0021-9398
Year: 1984
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Market Efficiency in Racetrack Betting
Article Abstract:
An analogy between stock market investing and horse race betting is drawn. Racetrack betting data are used in a test of the efficient market theory, more specifically, the investigation of whether betting strategies which yield positive rates of return may be devised on the basis of observable betting patterns. Methodology and data results are given. The conclusions are made that net profits can be made on place and show betting and that strategies may be developed which exceed the return from betting the favorite to win. The results are compatible with rational behavior.
Publication Name: The Journal of Business
Subject: Business, general
ISSN: 0021-9398
Year: 1984
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Market efficiency in racetrack betting: further evidence and a correction
Article Abstract:
A previous papers by the authors (1984) concluded that profitable strategies for win betting could not be devised but that strategies for show and place betting could be developed. Further research conducted on 706 races showed a much lower rate of return than the original study. Therefore, the workability of the original conclusion is, at best, questionable.
Publication Name: The Journal of Business
Subject: Business, general
ISSN: 0021-9398
Year: 1986
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