Lakonishok, JosefShleifer, AndreiVishny, Robert W.2016-07-191992Lakonishok, Josef, Andrei Shleifer, and Robert W. Vishny. 1992. “The Impact of Institutional Trading on Stock Prices.” Journal of Financial Economics 32 (1) (August): 23–43. doi:10.1016/0304-405x(92)90023-q.0304-405Xhttp://nrs.harvard.edu/urn-3:HUL.InstRepos:27692662This paper uses a new data set of quarterly portfolio holdings of 769 all-equity pension funds between 1985 and 1989 to evaluate the potential effect of their trading on stock prices. We address two aspects of trading by money managers: herding, which refers to buying (selling) the same stocks as other managers buy (sell) at the same time; and positive-feedback trading, which refers to buying winners and selling losers. These two aspects of trading are commonly a part of the argument that institutions destabilize stock prices. At the level of individual stocks at quarterly frequencies, we find no evidence of substantial herding or positive-feedback trading by pension fund managers, except in small stocks. Also, there is no strong cross-sectional correlation between changes in pension funds' holdings of a stock and its abnormal return.en-USJournal Article2016-07-1910.1016/0304-405X(92)90023-Q