From the October 2007 issue of Boomer Market Advisor • Subscribe!

What's in a ticker symbol? Apparently, strong returns

In a recent column in the Financial Times, John Authers asks what appears to be an obvious question, "Why do
some stocks do better than others?" The answer may surprise you.

According to Authers, it could be a change to a new and catchier ticker symbol. Case in point. On Aug. 24, Sun
Microsystems announced that it was changing its ticker from SUNW to JAVA - a catchy name that ties in with its history of developing Java technology.

Since then, he writes, it has outperformed the S&P 500 by more than 15 percent and has also strongly outperformed the tech sector. There are other examples. Since August of last year, Big Lots, the discount retailer, is up more than 60 percent -- far in excess of the market. Over the previous decade, its stock had declined: but then it changed its ticker from BLI to BIG.

Authers says that academic research confirms that there is a pattern. A study of flotations on the New York Stock Exchange by Adam Alter and Daniel Oppenheimer, of Princeton University, shows that stocks whose tickers could be pronounced as a word beat stocks with unpronounceable tickers for up to a year after flotation, by a small but statistically significant margin. Authers suspects this is one reason why an agribusiness exchange-traded fund launched recently opted for the ticker symbol MOO.

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