Value and size related equity investment strategies are supported by a large body of empirical research that shows a persistent premium, both longitudinally and crosssectionally. However, the competing rational and behavioural finance explanations for the success of these strategies are a subject of debate. The rational explanation is that the premium earned on value shares or shares of small companies can be attributed to higher risk. Behaviouralists argue that such shares are not riskier and attribute the premium to cognitive errors and biases in human decision making. The purpose of this study is to determine, firstly, whether the value and size premium exist in South Africa during the period July 2006 to June 2012, which includes one of the worst equity market crises in history. Secondly, this study sets out to determine whether the premium earned on value and size strategies are adequately explained by the principles of rational finance theory. To provide evidence regarding the existence of the value premium and size effect, returns are analysed, cross-sectionally, on portfolios of shares sorted by value and size. For evidence of a rational explanation, returns are regressed on value and size variables, and the relative riskiness of value and small companies is analysed. The results show evidence of a value premium in portfolios of small companies, but not big companies. The size effect is found not to be statistically significant. While regressions do show significant relationships between value and size variables and returns, these variables are found not to be associated with higher levels of risk. The conclusion is that the evidence does not support a rational, risk based explanation of the returns

Avsikten med denna studie har varit att studera problematiken som har uppstått i och med det växande fenomenet finansiella influensers och dess koppling till marknadsmanipulation. Med en explosiv ökning inom aktiehandeln på dagens finansmarknader är det många beslut som inte längre kan definieras med enbart klassisk finansiell teori. Det växande och mer irrationella fenomenet finansiella influensers ses som en potentiell källa till denna utveckling. Med hjälp av ett postmodernt ramverk ämnar studien undersöka och analysera effekten detta fenomen har på investeringsbeslut samt undersöka hur Marknadsmissbrukslagen påverkar dessa influensers. Detta då marknadsmanipulation i tidigare studier visat sig kunna ha en koppling till finansiella influensers ageranden. Studien tillämpar ett kvalitativt tillvägagångssätt med postmodern inriktning, i syfte att studera en av flera möjliga beskrivningar av verkligheten. För bästa möjliga resultat använder studien en triangulering av data vilket innebär dels en tematisk innehålls-analys utav nio semistrukturerade intervjuer där åtta av respondenterna utgörs av finansengagerade småsparare och där den nionde är yrkesmässig expert på området, dels en kvalitativ innehållsanalys av en dokumentstudie för att inkorporera förståelse kring studiens problematik som den tas upp i andra samhällsdiskurser. Studien visar hur människor uppfattar att finansiella influensers har stor påverkan på dagens finansiella beslut och att detta fenomen har stor potential att orsaka marknadsmanipulation genom uppmaningar till följarna. Resultaten visar på att en postmodern syn på fenomenet kan öka förståelsen för dess existens, detta genom att inte endast irrationell eller rationell teori lyckas självständigt beskriva företeelsen. En viss samexistens av teorierna anses därmed behövas och svaren visar också på en potentiell koppling till rationaliteten bakom att göra till synes irrationella finansbeslut i dagens marknader. Ett tecken på hur finans är hyperrealistiskt, d.v.s. ett fenomen som givits en ny kontext skiljd från dess ursprungliga mening. Hyperrealism medför också att finans kan ses som postmodernt. Den reglering som är ämnad att kontrollera dessa marknadsmanipulationer, dvs. Marknadsmissbrukslagen, visar sig lida av otydlighet och potentiell godtycklighet. Studien visar på hur denna uppfattning från flera marknadsaktörer grundar sig i övertygelser om potentiellt subjektiva domar baserade på kriterier som inte lätt förstås av vare sig småsparare eller av större marknadsaktörer. Regleringens otydlighet markerar dess frånkoppling från lagens logiska grund och förståelsen för Marknadsmissbrukslagen kan öka genom att se på den som en godtycklig spelregel. Denna aspekt målar också upp en bild utav hyperrealism utifrån att regleringen praktiskt kan tänkas agera som en spelregel för finansmarknaden men i dagens samhälle används som lag. Studien visar därmed ett ytterligare bevis för hur finans uppfattas som postmodernt. / The purpose of this study has been to examine the problems that have arisen as a result of the growing phenomenon that is financial influencers and its’ connection to market manipulation. With a rapid increase of stock trading in today’s financial markets, there are many decisions in themselves that can no longer be defined solely by classic financial theory. The growing and more irrational phenomenon of financial influencers is seen as one potential source of this development. Using a postmodern framework, the study intends to investigate and analyze the effects this phenomenon has on investment decisions and also examine how the Swedish Market Abuse Act (Marknadsmissbrukslagen) affect these influencers. This is done because market manipulation has shown to have a potential connection to the actions of financial influencers. The study applies a qualitative approach with a postmodern focus, in order to examine one of several possible descriptions of reality. To attain the best results possible this study implemented triangulation of data, which included a themed content analysis based on nine semi structured interviews where eight respondents were ordinary investors and the nineth respondent were a professional in this particular work field. The study also constitutes a qualitative content analysis of a document study in order to incorporate a deeper understanding for the study’s problematization as it is mentioned in the social discourse. The study shows how people perceive that financial influencers have a great affect on today’s financial decisions and that this phenomenon has substantial potential to cause market manipulation through urgings to followers. The results show that a postmodern view of the phenomenon can increase the understanding of its existence, this is done through showing that neither rational nor irrational finance theories can on their own fully explain the phenomenon. A certain coexistence of these theories is thus considered necessary. The study also shows a potential connection to the rationality behind making seemingly irrational financial decisions in today’s markets. A sign showing how finance is hyper-realistic, i.e., a phenomenon that given a new context separated from its original meaning. Hyperrealism also means that finance can be seen as postmodern. The regulation that intends to control these market manipulations, i.e. The Swedish Market Abuse Act, turns out to suffer from ambiguity and potential arbitrariness. The study shows how this perception by several market participants is planted on beliefs about potentially subjective judgements based on criteria that are not easily understood by ordinary investors nor larger market participants. The ambiguity of the regulation points out its disconnection from the logical foundation of law and the understanding of the Swedish Market Abuse Act therefore might increase by interpreting this law as an arbitrary game rule. This specific aspect also paints a hyperrealistic picture, as the regulation is practically understood as a game rule in financial markets, but in today’s markets it functions as a law. Thus, our study presents further evidence how finance is perceived as postmodern.