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July 30, 2008

Sovereign Wealth Funds => Stocks Weaken Faster

There's further evidence today why SWFs (sovereign wealth funds) aren't exactly seen as smart money:

Using an event study parameter approach, we find the short-run market reaction to be statistically insignificant in 11 out of 12 announcements of SWF investments; but in the long-run SWF-targets underperform both the S&P500 and the Dow Jones Financial Services Index Fund.

[Jory, Surendranath, Perry, Mark J. and Hemphill, Thomas A.,Shanghai, Dubai, Mumbai or Goodbye?(July 26, 2008)]

Feel free to come up with your own re-translation of SWF, but I'm using Stocks Weaken Faster for now.

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