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DTB
And how do you square this idea with the observation that stocks dumped from an index tend to do better, not worse, than the average?
Do you happen to have any references about stocks performing better after being removed from an index?
My guess is that when it is apparent that they are going to be removed, there is an initial sell off by institutions from funds and ETFs, so when the stock is actually removed, it has already had a significant drop. Then over the next 6 to 12 months there is a rebound. So it looks like the stock is performing better, but it is really just recovering to what it was before the sell off.
Craig
