Tech Stock Valuation

54 CHAPTER 3 INVESTMENT ADVICE ON THE INTERNET

compare with Desai and Jain’s (1995) conclusions regarding common stock

recommendations made by prominent money managers at Barron’s Annual

Roundtable from 1968–1991. Such buy recommendations earn significant

abnormal returns of 1.91% from the recommendation day to the publication

day, a period of about 14 days. However, abnormal returns are essentially zero

for one- to 3-year postpublication day holding periods. Thus, individual

investors would not benefit by investing according to Roundtable recommenda-

tions published in Barron’s.

II. INVESTMENT INFORMATION ON THE INTERNET

Some analysts contend the Internet ...