The researchers then tested name complexity and the performance of real initial public offerings listed on the New York and American Stock Exchanges. A $1,000 investment in a group of stocks with easy names yielded $112 more in profit than the same investment in a group with difficult names. But the effect began to disappear over time. "This might be because factors other than name fluency have a more pronounced effect on stock price as time passes," said Adam Alter, a graduate student at Princeton who was the lead author of the study. Finally, the scientists compared ticker symbols that were pronounceable, like PER, the code for the Perot Systems Corporation, to those that were not, like GTS, the symbol for the Global Telesystems Group. Pronounceable ticker codes did better than unpronounceable ones after a day of trading, but again the effect diminished to insignificance after the first day.

People respond positively to easily processed information in other areas as well. For example, they are more likely to believe an aphorism that rhymes ("woes unite foes") than one with an identical meaning that does not rhyme ("woes unite enemies"). Studies cited in the report demonstrate that people more often judge easily processed information to be true, likable, familiar and convincing than more complex data. Does this mean that picking stocks by their ease of pronunciation is the royal road to investing success? "Definitely not," Mr. Alter said. "Name fluency is only one factor of many that influence stock prices," he said. "Our results suggest that stock price models will benefit from taking into account psychological factors like name fluency — not that name fluency is the only or most important determinant of stock prices."

http://www.nytimes.com/2006/05/30/health/30stoc.html?_r=1&oref=slogin