A Contrarian Strategy for Growth Stock Investing: Theoretical Foundations and Empirical Evidence

A Contrarian Strategy for Growth Stock Investing: Theoretical Foundations and Empirical Evidence
ISBN-10
0899308031
ISBN-13
9780899308036
Category
Business & Economics / Finance / General
Pages
177
Language
English
Published
1993
Publisher
Quorum Books
Author
Donald J. Peters

Description


Relatively few academics or practitioners have systematically explored growth stocks. Growth stocks usually involve exciting companies whose sales and earnings are growing significantly faster than other companies and the economy in general. This book finds that high expectation growth stocks or the ones that everyone loves have poor relative returns. Low expectation growth stocks, however, have strong performance. The author uses the PE/GROWTH ratio to rank the market's expectations for these stocks.

The book shows how investors may be able to ascertain whether the interests of a public company's management are aligned with those of shareholders. Sophisticated and institutional investors will find the book's thorough analysis and insightful perspective on growth stocks very informative. The short-term mean reverting aspects of growth stocks are uncovered, and other market microstructure anomalies are discussed. The work addresses practical trading ideas and the need for diversification. Ideal as supplemental reading for courses in investment management and finance, this book examines the components of trading costs and presents arguments for a patient trading style.

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