Social media’s ‘stale news effect’ spurs stock volatility, study finds

Anyone watching the stock market has seen this: A post hits Twitter containing old news, and investors react as if it were new.

A working paper by researchers at Oxford University suggests the phenomenon is prevalent, creating a source of excess volatility for investors. It found evidence that the unmediated flood of news and opinion that pours over the social media transom results in some stocks getting whipped around for weeks by the same facts.

Like many academic studies into equities, the Oxford one examined theories calling into question the market’s ability to process information with perfect efficiency, in this case something called the “stale news” hypothesis. It says that investors probably aren’t the automatons of rationality depicted in classical market models when they can’t even recognize when a story has been reported already. read more

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Knowing when to sell: Using a rebalancing system can keep emotions at bay

“How to Find the Best Dividend Stocks”; “Stocks for a Bear Market”; “Five Stocks to Take Advantage of Central Bank Policies” – just about everywhere you look in the financial media, you’ll find tips on buying stocks.

Far, far less often will you find advice on when you should sell a stock, however – and knowing when to sell may be even more important than knowing what to buy. read more

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Major airlines are betting big that oil has seen its bottom

Big airlines are making waves in the oil market for the first time since prices went into a tailspin nearly two years ago, betting this may be their best chance to lock in cheap jet fuel for years to come, industry and market sources say.

A number of airlines moved last week to place significant oil price hedges for 2017, 2018 and even 2019, according to three trading sources familiar with money flows. They declined to specify companies, but said it was the largest flurry of such activity in more than a year. read more

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Plunge of U.S. solar stocks takes down yieldcos but brings in contrarians

The likely bankruptcy of solar developer SunEdison Inc is pulling down so-called yieldcos, once thought of as a safer way to invest in the notably volatile renewable energy industry, and bringing in income-oriented fund managers who say they are picking up shares at a bargain.

Yieldcos – spinoffs of solar companies that own solar farms and, like real estate investment trusts, pay steady dividends to shareholders – have not proven immune to the 28-per-cent decline in solar stocks for the year to date. Shares of 8Point3 Energy Partners LP, a yieldco formed by First Solar Inc and SunPower Corp, are down 12.3 per cent since the start of January, while shares of NextEra Energy Partners LP , a spinoff of parent NextEra Energy Inc, are down 12.5 per cent over the same time. read more

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I’ve contributed too much to my RSP this year. What should I do?

Dear Nancy

After completing my income tax return for 2015, I found out that I made my RSP contribution twice in the amount of $15,000. My allowable RSP contribution room was $15,000. I did one contribution in February and the second the end of October. My allowance for 2016 is $20,000. How do I fix the over contribution? Do I withdraw $15,000 and then use it for my 2016 contribution? read more

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The $1-trillion short underlying U.S. stocks’ spring awakening

Skepticism is one thing this rally hasn’t lacked.

Amid its biggest about-face in nine decades, a funny thing has happened in the U.S. stock market, where rather than loosen their grip bears have grown ever-more impassioned. They’ve sent short interest to an eight-year high and above $1-trillion, by one analyst’s math. Position reports from the Commodity Futures Trading Commission show mutual fund managers are more skeptical now than any time since at least 2010. read more

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Three top stock picks from Scotia Wealth’s Stan Wong

Stan Wong is director and portfolio manager at Scotia Wealth Management. His focus is North American large caps and ETFs.

Top Picks:


Last bought in October 2015 at ~C$49

Cineplex is one of Canada’s leading entertainment companies, operating over 160 theatres and serving over 77 million patrons annually. Cineplex shareholders benefit from the company’s dominant franchise branding, strong management and strategic execution. read more

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Weak U.S. earnings expectations set stage for stock gains

When Wall Street’s quarterly earnings season kicks in to high gear next week, hundreds of companies will vie for the bragging rights that come from “beating the Street” – showing revenues and profits that are higher than analysts expected.

That hurdle may be unusually easy to clear this quarter, as analysts, who saw oil prices and stocks collapse at the start of the year, went really negative on the first quarter of 2016. read more

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Fidelity marks down stake in pre-IPO startups Cloudera, Dropbox

Fidelity Investments has slashed its estimated valuation of technology companies Cloudera and Dropbox, a report on Wednesday showed, in the latest indication of concern over the high prices of startups that have raised many millions from private investors, but delayed going public.

Boston-based Fidelity, which has become one of the largest investors in pre-IPO companies through mutual funds that include the $100-billion-plus Contrafund, marked down its stake in big data software company Cloudera by nearly 37 per cent, the mutual fund disclosed in its monthly holdings report. read more

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