An analysis of four decades of hospitality industry stock returns shows that investors have attempted to time the market—and missed.

As explained by Cornell professor David Weinbaum, the timing of investment flows has been inverse to stock performance. Weinbaum's analysis of hotel investment and hospitality industry investing, "Assessing the Historical Performance of Hospitality Stocks: The Investor's Perspective," is published in the February 2009 issue of Cornell Hospitality Quarterly.

An assistant professor at the Cornell's Johnson School of Management, Weinbaum used a novel approach for calculating restaurant and hotel investment returns using a dollar-weighted rate of return. Examining investment flows into and out of hospitality stocks from 1962 through 2006, he determined that investors in hospitality stocks have attempted to time the market during that period.

Then he compared the actual, dollar-weighted results to a "perfect" buy-and-hold portfolio of restaurant and hotel stocks. What he discovered was that the timing of investment inflows has been inverse to stock performance. That is, hospitality firms have issued equity capital near market highs, and they have retired capital near market lows.

The journal is published by Cornell's Center for Hospitality Research, and the article about restaurant and hotel stock investment is available for free download at

http://www.hotelschool.cornell.edu/research/chr/pubs/quarterly/featured/execsummary-14985.html