Methodological Pluralism and the Possibilities and Limits of Interviewing

Against the background of recent methodological debates pitting ethnography against interviewing, this paper offers a defense of the latter and argues for methodological pluralism and pragmatism and against methodological tribalism. Drawing on our own work and on other sources, we discuss some of the strengths and weaknesses of interviewing. We argue that concern over whether attitudes correspond to behavior is an overly narrow and misguided question. Instead we offer that we should instead consider what interviewing and other data gathering techniques are best suited for. In our own work, we suggest, we have used somewhat unusual interviewing techniques to reveal how institutional systems and the construction of social categories, boundaries, and status hierarchies organize social experience. We also point to new methodological challenges, particularly concerning the incorporation of historical and institutional dimensions into interview-based studies. We finally describe fruitful directions for future research, which may result in methodological advances while bringing together the strengths of various data collection techniques. © 2014 Springer Science+Business Media New York

Dumb Money: Mutual Fund Flows and the Cross-Section of Stock Returns

We use mutual fund flows as a measure for individual investor sentiment for different stocks, and find that high sentiment predicts low future returns at long horizons. Fund flows are dumb money %uF818 by reallocating across different mutual funds, retail investors reduce their wealth in the long run. This dumb money effect is strongly related to the value effect. High sentiment also is associated high corporate issuance, interpretable as companies increasing the supply of shares in response to investor demand.

Aggregate Short Interest and Market Valuations

We examine some basic data on the evolution of aggregate short interest, both during the dot-com era, and at other times in history. Total short interest moves in a countercyclical fashion. For example, short interest in NASDAQ stocks actually declines as the NASDAQ index approaches its peak. Moreover, this decline does not seem to reflect a substitution away from outright short-selling and towards put options, as the ratio of put-to-call volume displays the same countercyclical tendency. The evidence suggests that: i) arbitrageurs are reluctant to bet against aggregate mispricings; and ii) short-selling does not play a particularly helpful role in stabilizing the overall stock market.

A Review and Meta-Analysis of Age-Based Stereotype Threat: Negative Stereotypes, Not Facts, Do the Damage.

Stereotype threat effects arise when an individual feels at risk of confirming a negative stereotype about their group and consequently underperforms on stereotype relevant tasks (Steele, 2010). Among older people, underperformance across cognitive and physical tasks is hypothesized to result from age-based stereotype threat (ABST) because of negative age-stereotypes regarding older adults’ competence. The present review and meta-analyses examine 22 published and 10 unpublished articles, including 82 effect sizes (N = 3882) investigating ABST on older people’s (Mage = 69.5) performance. The analysis revealed a significant small-to-medium effect of ABST (d = .28) and important moderators of the effect size. Specifically, older adults are more vulnerable to ABST when (a) stereotype-based rather than fact-based manipulations are used (d = .52); (b) when performance is tested using cognitive measures (d = .36); and (c) occurs reliably when the dependent variable is measured proximally to the manipulation. The review raises important theoretical and methodological issues, and areas for future research. (PsycINFO Database Record (c) 2015 APA, all rights reserved

Investor Sentiment and Corporate Finance: Micro and Macro

We document that net equity issuance is considerably more sensitive to aggregate stock returns and Q's than to firm-level stock returns and Q's. Very similar patterns also emerge when we look at merger activity. In light of earlier work (Campbell 1991, Vuolteenaho 2002) which finds that aggregate stock returns are less informative about future cashflows than are firm-level stock returns--and thus, potentially more strongly influenced by investor sentiment--these results suggest that both equity issuance and mergers are to a significant extent driven by market-timing considerations, as opposed to by purely fundamental factors.

Short Sale Constraints and Stock Returns

Stocks can be overpriced when short sale constraints bind. We study the costs of short selling equities, 1926-1933, using the publicly observable market for borrowing stock. Some stocks are sometimes expensive to short, and it appears that stocks enter the borrowing market when shorting demand is high. We find that stocks that are expensive to short or which enter the borrowing market have high valuations and low subsequent returns, consistent with the overpricing hypothesis. Size-adjusted returns are one to two percent lower per month for new entrants, and despite high costs it is profitable to short them.