We use quarterly institutional ownership changes to test the effect of investment horizon on institutional investors' incentives to acquire private information on long term earnings. Short horizon institutions' ownership changes contain private information on long term earnings, but only to the...

We provide evidence that transient institutional investors (i.e., those actively trading to maximize short term profits) trade to exploit the post-earnings announcement drift (PEAD). We estimate that transient institutions' arbitrage generates an abnormal return of 5.1 percent (or 22 percent...