Interesting piece in the WSJ this morning that got me thinking about the “GE alumni anomaly”. As the WSJ pointed out, recent GE alumni, from Gary Wendt at Conseco, to Robert Nardelli at Home Depot, haven’t been unalloyed successes. Their stocks — and the equities of other GE alumns — have generally underperformed the market.
Just for fun, I went back and looked at a subset of GE “graduates” in a miniature event study. How would you have done if you had bought the company’s stock at close of business on the day the GE savior showed up (ex ante), and then sold the position and went short four days later (ex post)?
Here are the results. While it will won’t be the next January effect, it is food for thought….