WOM Impacts Mutual Fund Managers' Investing
Mutual fund managers located in the same city tend to buy the same stocks, indicating that word of mouth in a location plays a role in their investment decisions, according to a study by a team of professors from Princeton, Harvard, and Syracuse University.
The study theorizes that fund managers in a given city talk to each other at investment conferences and other events, exchanging information that influences their investment activities.
Source: Harrison Hong, Jeffrey D. Kubik & Jeremy C. Stein, "Thy Neighbor's Portfolio: Word-of-Mouth Effects in the Holdings and Trades of Money Managers".
