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dc.contributor.authorTaylor, Lukeen_NZ
dc.identifier.citationTaylor, L. (2000, March 31). The disposition effect: Do New Zealand investors keep their mistakes? (Thesis). Retrieved from
dc.description.abstractThis paper tests the disposition effect first tested by Odean (1998) the tendency of investors to show a preference towards realising winning investments over losing investments in New Zealand by analysing 125 trading accounts from a nationwide retail brokerage house between the 1st June, 1988, to the 30th April, 1999. The analysis is performed using two different reference points for measuring winning investments and losing investments. Firstly, the average purchase price of the security is used and secondly, a relative strength measure is employed to indicate the recent performance of the security. Overall, the investors tend not to exhibit characteristics of the disposition effect, when the average purchase price is used as a reference point from which to evaluate winners and losers. When the relative strength measure is used on the same data set, the investors tend to exhibit a slight disposition effect, which is driven by the more frequent traders in the data set. However, this disposition effect seems to disappear once the data set is expanded to include addition sales for which the purchase price is unknown.en_NZ
dc.subjectdisposition effecten_NZ
dc.subjectNew Zealanden_NZ
dc.subjecttrading accountsen_NZ
dc.subjectretail brokerage houseen_NZ
dc.subject1st Juneen_NZ
dc.subjectto the 30th Aprilen_NZ
dc.subjectwinning investmentsen_NZ
dc.subjectlosing investmentsen_NZ
dc.subject.lcshHF Commerceen_NZ
dc.subject.lcshHF5601 Accountingen_NZ
dc.subject.lcshHG Financeen_NZ
dc.titleThe disposition effect: Do New Zealand investors keep their mistakes?en_NZ
otago.schoolFinanceen_NZ of Otagoen_NZ Thesesen_NZ
otago.openaccessAbstract Only
dc.identifier.eprints651en_NZ & Quantitative Analysisen_NZ
dc.description.referencesBern, D, 1965, An experimental analysis of self-persuasion, Journal of Experimental Social Psychology 1, 199-218. Benartzi, Shlomo, and Richard Thaler, 1995, Myopic loss aversion and the equity premium puzzle, Quarterly Journal of Economics 110, 73-92. DeBondt, Werner, and Richard Thaler, 1985, Does the stock market overreact?, Journal of Finance 40, 793-807. Ferris, Stephen, Robert Haugen, and Anil Makhija, 1988, Predicting comtemporary volume with historic volume at differential price levels: Evidence supporting the disposition effect, Journal of Finance 43, 677-697. Kahneman, Daniel, and Amos Tversky, 1979, Prospect theory: An analysis of decision making under risk, Econometrica 46, 171-185. Lakonishok, Josef, and Seymour Smidt, 1986, Volume for winners and losers: Taxation and other motives for stock trading, Journal of Finance 41, 951-974. Odean, Terrance, 1998, Are investors reluctant to realise their losses?, Journal of Finance 53, 1775-1798. Shefrin, Hersh, and Meir Statman, 1985, The disposition to sell winners too early and ride losers too long: Theory and evidence, Journal of Finance 40, 777-790. Weber, Martin, and Colin Camerer, 1998, The disposition effect in securities trading: An experimental analysis, Journal of Economic Behavior and Organisation 33, 167-184.en_NZ
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