Shareholders are aware of this resistance and thus consider project terminations good news. Even people who think that it is possible to beat the market through stock selection seem to think that successful market timing is impossible. Furthermore, the returns on the market timer's portfolio increase as the level of his information increases. Even modest amounts of information can bring substantial advantage. Good Companies, Bad Stocks, Journal of Portfolio Management , Summer 1989 .
Growth stocks are stocks of growth companies.
These two professors show that the opposite is true. Their evidence suggests that, on average, the higher the growth opportunities of a company at a given time, the lower the risk-adjusted return in the subsequent period. Journal of Financial and Quantitative Analysis , September 1987. We show that a well-diversified portfolio of randomly chosen stocks must include at least 30 stocks for a borrowing investor and 40 stocks for a lending investor. This contradicts the widely accepted notion that the benefits of diversification are virtually exhausted when a portfolio contains approximately 10 stocks.