Forget Due Diligence, Just See If You Can Pronounce It

from the what-passes-for-investing-these-days dept

It does often seem like people buy and sell stocks for reasons that have little to do with the fundamentals of what they're investing in -- but even with that in mind it's a bit surprising to hear that the ease of pronouncing the company's name or stock symbol can often lead to more investment in their stock. Basically, the report suggests, there's a psychological impact where people feel more comfortable buying stock when they can easily state the name. The impact is most noticeable right after an IPO -- which often seems to be the time when the least amount of rationality is used in making investment decisions. Perhaps the reason Vonage had such a weak IPO was that some people were confused over whether it was pronounced "voh-nage" or "vah-nage." Now we just need someone to start a mutual or hedge fund based on this tidbit of info.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    The Ghost in the Machine, May 30th, 2006 @ 7:39pm

    Damn physcological warfare.

     

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  2.  
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    zachary pond, May 30th, 2006 @ 7:45pm

    after all of their marketing efforts, how could anyone possibly not know how to say the name?

     

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  3.  
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    David Neawedde, May 30th, 2006 @ 8:03pm

    Very interesting. Yeah VOnage's IPO wasn't so hot...

     

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  4.  
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    William C Bonner, May 30th, 2006 @ 8:14pm

    Vonage, said like phone-age

    I learned the pronunciation early on from a head of marketing at the company at a trade show with the o being a long o. sometime after that, the mass marketing began, and they went a different direction.

    I've seen this sort of thing happen with companies in the past, Nokia being the most noticable. (When I first did dealings with the company, I was working with nokia employees in switzerland, who were coming down to visit from finland, so I believe that they knew how to pronounce it)

    Nokia was pronounced nok-ia with a long o. After I came back to the US in the mid 90s, the US presence was being referred to as no-kia.

    the spelling all looks the same, but the emphasis going from the front to the back, and where the k was connected has always made the second way I learned seem to jump out as me as wrong.

     

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  5.  
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    Frank Burkenstein, May 30th, 2006 @ 8:14pm

    ownage

    I thought the 'v' was silent.

     

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  6.  
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    Anonymous Coward, May 30th, 2006 @ 9:08pm

    Sure, companies have control over their name but who decides what the stock symbol will be? Do they control that as well?

     

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  7.  
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    hunter, May 30th, 2006 @ 9:56pm

    same thing with ordering wine in restaurants. Most people afraid to look stupid in front of friends or waiters.

     

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  8.  
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    Alex Nassour, May 30th, 2006 @ 11:10pm

    Pronounce that.

    Its funny how sub-standard pre-college education is in the US...

     

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  9.  
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    Ben Robinson, May 31st, 2006 @ 12:54am

    UK Vonage TV Ads

    On the UK TV adds i have seen Vonage is pronounced "vonnij", which is not how i have always probounced it.

     

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  10.  
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    Republican Gun, May 31st, 2006 @ 5:04am

    Pownage

    Too bad Vonage didn't Pownage.

     

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  11.  
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    cjay, May 31st, 2006 @ 7:20am

    Fromage?

    I always pronounced it with the emphasis on the second syllable and a slight french flair voh- nazh... but then I called tech support and the automated voice corrected me...

     

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  12.  
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    SPR, May 31st, 2006 @ 7:54am

    Pronounce it?

    Does that mean investors would have a problem with a hedge fund called "Disfunctional" or "Dysfunctional"?

     

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  13.  
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    Anonymous Coward, May 31st, 2006 @ 8:04am

    RE: Pronounce it?

    > Does that mean investors would have a problem with a hedge fund called "Disfunctional" or "Dysfunctional"?

    Yes, it does. However, they would readily buy stock from a company named "Worthless".

     

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  14.  
    identicon
    SPR, May 31st, 2006 @ 8:06am

    Re: Pronounce that.

    It's funny how sub-standard post-college education is in the US.

     

    reply to this | link to this | view in thread ]

  15.  
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    Smart Alec, May 31st, 2006 @ 8:07am

    Re: Pronounce that.

    > Its funny how sub-standard pre-college education is in the US...

    It's funny how substandard college education is in the U.S.

    Speaking of which... It's "it's" not "its" and the word "substandard" is not spelled with a hyphen.

     

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  16.  
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    SPR, May 31st, 2006 @ 9:38am

    Re: Re: Pronounce that.

    You really know how to end discussion on a subject, don't you?

     

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  17.  
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    College boy, May 31st, 2006 @ 2:05pm

    Re: Re: Pronounce that.

    I find it confusing how you could say American college, and post college, education is substandard. The fact is, more people come to the U.S. for education than any other country in the world.

     

    reply to this | link to this | view in thread ]


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