Listening in on Investors’ Thoughts and Conversations

In one sentence

The information that investors value and the information they end up sharing with other investors can be very different (and of lower quality).

Summary

We propose that investors’ natural desire to cast themselves in a favorable light can inadvertently lead to the propagation of noise. Consistent with this proposition, we show that investors disproportionately share content suitable for impression management even when it is less informative about returns. High sharing associates with low future returns.

Research topics