To eliminate this possibility, we conducted a mediational analysis using the total value of shares offered by each company as a proxy for company size.
These results imply that simple, cognitive approaches to modeling human behavior sometimes outperform more typical, complex alternatives. A second group of participants estimated the future performance of fabricated stocks that had been prejudged as having simple or complex names for a full list of stock names and their fluency ratings, see Data Set 1, which is published as supporting information on the PNAS web site.
Stock market losses cause wealth erosion. Consistent with the finding that people are more optimistic when in a good mood 8markets are more likely to appreciate on sunny rather than rainy days 9 One concern with the second study is that investors may have derived useful semantic information from company names.
To rule out the possibility that this effect was limited to one particular stock market, we conducted the same analysis using data from two distinct markets. Some of this will be a bit of an oversimplification but by the time you're done reading it, you'll know a lot more than the general public about the way the stock market works and how stock prices are set.