Beware Of Fake Stock News In The Financial Markets

But if we change the measurement basis to two years then the same rating gives Woods a very poor performance score with a 0% success rate and -70.8% average return:

This shows just how volatile small cap stocks can be, especially as they can react quickly to positive or negative news. We can also see this from the TipRanks graph below which reveals how positive news can lead to plus 15% returns for small cap stocks over a two-month period (vs about 5% for S&P 500 stocks).

Conflicts of interest

As we know, it’s not just bloggers whose impartiality can be compromised. Analysts often face a conflict of interest between keeping corporate relationships strong and writing reports that really reflect their analysis of a company. We covered that in this blog post when we looked at the role of the sell-side analyst in today’s markets.

But while investors are aware of analyst’s ongoing dilemma, there is an assumption that bloggers are not subject to this same corporate conflict of interest. Will this impression now be tainted by these allegations?

 

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Disclaimer: TipRanks is an independent cloud based service that measures and ranks digitally published financial advice. TipRanks' natural language ...

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