first comment, “I am encouraged that pharmascreen has instituitions that hold heir stock. the insitituitions will help monitor management and will use their influence to effect the change needed with pharmascreen’s management” is the statement correct or incorrect? answer suggested incorrect, but isn’t this active monitoring? which provides incentive? another question from one of the AM exams, the comments went sth like" the recent trend in technology stock makes investors bid up the price" and asks to identify a psychological trait. answer suggested representative, I am curious if it can be explained by aversion to ambiguity , as the implication of aversion to ambiguity is momentum investing
check if they hold very small amount of Pharmascreen stock and can they sell it easily if they want to? in that case, there’s no incentive to push for change (or monitor), rather selling it off is the easier option. representativeness suggests basing your forecasts on current or past trends, if technology sector is in uptrend, investors tend to rate it too highly and overprice it believing that if it has performed well over the recent past, it’ll continue to do so in future as well.
dkitty Wrote: ------------------------------------------------------- > first comment, “I am encouraged that pharmascreen > has instituitions that hold heir stock. the > insitituitions will help monitor management and > will use their influence to effect the change > needed with pharmascreen’s management” > is the statement correct or incorrect? > answer suggested incorrect, but isn’t this active > monitoring? which provides incentive? This answer is correct if you see it from the point of view if definition. The institutional investors will help monitor and effect the change needed. But you also have to look at other factors here-e.g. liquidity of the stock, the % of stock held by them. Here the biggest shareholder is cape fear capital who holds .21% of total stock outstanding. This means they will sell off the stock rather than monitor the management or in any other way take active role.
Yes, derswap07’s comments are right.
crap, missed that .21% thank you everyone