TY  - JOUR
AU  - Hong,Harrison
AU  - Kubik,Jeffrey D.
AU  - Stein,Jeremy C.
TI  - The Neighbor's Portfolio: Word-of-Mouth Effects in the Holdings and Trade of Money Managers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9711
PY  - 2003
Y2  - May 2003
UR  - http://www.nber.org/papers/w9711
L1  - http://www.nber.org/papers/w9711.pdf
N1  - Author contact info:
Harrison Hong
Department of Economics
Princeton University
26 Prospect Avenue
Princeton, NJ 08540
Tel: 609/258-0259
Fax: 609/258-0771
E-Mail: hhong@princeton.edu

Jeremy C. Stein
Department of Economics
Harvard University
Littauer 209
Cambridge, MA  02138
Tel: 617/496-6455
Fax: 617/496-7352
E-Mail: jeremy_stein@harvard.edu
AB  - A mutual-fund manager is more likely to hold (or buy, or sell) a particular stock in any quarter if other managers in the same city are holding (or buying, or selling) that same stock. This pattern shows up even when controlling for the distance between the fund manager and the stock in question, so it is distinct from a local-preference effect. It is also robust to a variety of controls for investment styles. These results can be interpreted in terms of an epidemic model in which investors spread information about stocks to one another by word of mouth.
ER  -