COLUMNISTS Marketers of fast-moving consumer goods, like toothpaste, long ago discovered the “left-digit effect” – consumers’ perception of price is skewed by the leftmost digit, so a $1.99 tube of toothpaste sells better than a $2 tube. The other key factor is a short and instantly recognisable brand name.
It turns out that traders in stocks are just as irrational as toothpaste buyers. Two years ago, research from Princeton showed that stocks whose ticker symbol (key information needed to make a trade) could be pronounced as a word beat stocks whose tickers cannot be remembered so easily. Big Lots’ price rose dramatically once its ticker changed from BLI to BIG.
