Why Wall Street’s ‘coolest’ stocks can leave investors cold MarketWatch 2/9/2021
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Wall Street’s most popular stocks are like the cool kids who won popularity contests in high school.
Yet many researchers have found that the winners of those contests often end up living far more troubled lives than the rest of us. One famous study found that the coolest kids at age 13 had, by the time they reached 23, a 40% greater rate of alcohol and marijuana abuse and a 22% greater rate of adult criminal behavior.
The analogy between cool kids and cool stocks is closer than you might think. Researchers have found that on average, the shares of the most-popular companies lag those of the least-popular companies.