It is not rare to find examples of data mining in the literature relating financial data to stock market and general business performance. An empirical analysis was to evaluate a model created in mid-2001 which has as its objective the prediction of annual wealth appreciation performances over a three-year period (January 1998 to February 2001) of 563 IPOS issued in 1997. Since creation of the model, the markets have suffered through a prolonged period of poor returns to its investors. In fact, the data do suggest that forecasting during the pre-2001 period may have been more likely to be successful than the "interim" period since. The great bulge in the performance of the TOP group (top quintile) had disappeared in early 2001. However, the strength of the stocks during 1998-2001 was enough that the five-year (actually January 1998 to July 2003) means still reflected that earlier performance. Perhaps it is a further mark of the potency of the model that it was able to weather these extremes. Like all models there are more questions than answers. While this empirical test may have contributed to the question about whether any modeling might be effective, we still are concerned about generalizing it. There are structural issues about using the techniques in other times and for other types of equities. There are substantive questions about the cause and effect - the process by which the variables utilized in the prediction scheme materialize and lead to the results in the markets.
53 AN EMPIRICAL TEST OF AN IPO PERFORMANCE PREDICTION MODEL: ARE THERE "BLUE CHIPS" AMONG IPOS? John Miller, Sam Houston State University Robert Stretcher, Sam Houston State University ABSTRACT An earlier study of 563 firms which issued IPOs during 1997 identified and estimated
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