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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.

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Comments on “Forget Due Diligence, Just See If You Can Pronounce It”

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William C Bonner (profile) says:

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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