Indian Journal of Finance

Open Access Open Access  Restricted Access Subscription Access

Evaluating Momentum and Contrarian Strategies For Technology Stocks During Excessive Speculation


Affiliations
1 Assistant Professor of Economics, College of Business and Public Administration, University of North Dakota, ND, United States

   Subscribe/Renew Journal


Momentum and contrarian returns have been documented by a large number of studies. In this paper we investigate the performance of technology stocks by using these two widely followed investment strategies during a speculative boom period. We discuss the effectiveness of various long and short trading strategies for a well balanced sample of technology stocks and find that by executing a simple buy bottom strategy, a technology investor could take advantage of the overreactions in order to generate higher returns during the period of excessive speculation. We also show that accounting for conditionally heteroskedasticity increases the evidence that risk adjusted returns are strongly related to market betas of a benchmark return and NASDAQ composite index returns.
User
Subscription Login to verify subscription
Notifications
Font Size

Abstract Views: 103

PDF Views: 0




  • Evaluating Momentum and Contrarian Strategies For Technology Stocks During Excessive Speculation

Abstract Views: 103  |  PDF Views: 0

Authors

Pradosh Simlai
Assistant Professor of Economics, College of Business and Public Administration, University of North Dakota, ND, United States

Abstract


Momentum and contrarian returns have been documented by a large number of studies. In this paper we investigate the performance of technology stocks by using these two widely followed investment strategies during a speculative boom period. We discuss the effectiveness of various long and short trading strategies for a well balanced sample of technology stocks and find that by executing a simple buy bottom strategy, a technology investor could take advantage of the overreactions in order to generate higher returns during the period of excessive speculation. We also show that accounting for conditionally heteroskedasticity increases the evidence that risk adjusted returns are strongly related to market betas of a benchmark return and NASDAQ composite index returns.