An Analysis of the Recommendations of the “Superstar” Money Managers at Barron's Annual Roundtable

Authors

  • HEMANG DESAI,

  • PREM C. JAIN

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    • A.B. Freeman School of Business, Tulane University, New Orleans, Louisiana. We thank Barron's, Rick Boebel, Steve Brown, Louis Chan, Anindya Chatterjee, N.K. Chidambaran, Aloke Ghosh, Irv LaValle, Jevons Lee, John Liukkonen, Ajay Malpani, Amit Mathur, Thomas Mećl, Russ Robins, Tahiti Roy, Bin Shi, K. Srinivasan, René Stulz, Joaquin Trigueros, Tracie Woidtke, Kent Womack, Shuang Wu, and workshop participants at the National Taiwan University and Tulane University for their helpful comments on previous drafts. Detailed comments from an anonymous referee are gratefully acknowledged.


ABSTRACT

We examine the performance of common stock recommendations made by prominent money managers at Barron's Annual Roundtable from 1968 to 1991. To avoid survivorship bias, we examine the performance of recommendations by all the participants. The buy recommendations earn significant abnormal returns of 1.91 percent from the recommendation day to the publication day, a period of about 14 days. However, the abnormal returns are essentially zero for one to three year postpublication day holding periods. Thus, an individual investing according to the Roundtable recommendations published in Barron's would not benefit from the advice.

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