Can Listed Companies' Profit Information Guide Stock Investment Decision-making?——A Stochastic Dominance Analysis of Marginal Condition

This paper classifies A share listed companies into corresponding investment portfolios according to profit information and tests the dominance relationship within investment portfolios by using the stochastic dominance rule of marginal condition to judge the guiding role played by the profit information of listed companies in stock investment decision-making.The result indicates that in the long run the blue chip stocks can not only dominate market but also dominate the stocks that earn a little profit and the stocks that suffer losses.The dominance relationship will be strengthened as the market system and policies are sound,which shows that the profit information has certain information content.In different test cycles,significant dominance relationship exists among portfolios,which shows that the profit information of listed companies can guide investment decision-making to some degree.