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".

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Posted by WOMMA Editor at October 11, 2005 | Link

CGM Bests Ads for Influencing Consumers

Consumers are 50 percent more likely to be influenced by word of mouth recommendations than by traditional TV or radio ads, reports Intelliseek in a new study.

Consumers who actively skip or delete TV and online ads are 25 percent more likely to create and respond to consumer generated media on message boards, forums, and blogs, the study also found. Positive word of mouth from someone a person knows ranks highest in influencing consumer purchase decisions.

Source: Nielsen BuzzMetrics, "2005 Consumer-Generated Media (CGM) and Engagement Study".

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Posted by WOMMA Editor at October 4, 2005 | Link