Market reactions to the Financial Post's "hot stock" column

We examine the market reaction to recommendations in the Financial Post's " Hot Stock" column. For buy recommendations, we find a significant average e xcess return of 1.23% oil the publication day; the average excess return is greater (1.84%)for small firms. We also document a significant increase in trading volume and ill stock price volatility on and immediately prior To the publication day. Finally, we detect a pattern of return reversal within 14 trading days after the publication. Volume and volatility subside to no rmal levels within the period of time in which reversals occur. We interpre t our results as evidence of trading on second-hand public information.