Investor Behavior & Fundamental Analysis: A Case of Karachi Stock Exchange Investor’s

The current study hypothesized the investor behaviors with stock market fundamental analysis. Thus, the study used convinance and simple random sampling for data acquisition and study has used descriptive, correlation regression and combined effect t tests to interpret the data. And have concluded that facets of investor behavior i-e overconfidence, optimism, involvement and risk behavior has significant relation with stock market fundamental analysis. Hence, study concluded its finding up to historic investigations.


INTRODUCTION
The behavior of corporate financial managers, stock market regulators and investors is found biased fundamentally and their decisions are prone as emotional decisions (Ramiah et al, 2014). Such behavior contains on overconfidence behavior, optimism behavior, involvement behavior and risk behavior (Iqbal & Butt, 2015). And these behaviors are cognitive short-cuts (Baron, 2007).
Thus , Farsi et al, (2014) concluded that overconfidence behavior has significant relation with entrepreneurial decision in their study. Bao, (2014) has also concluded as adverse relation of such behavior with capacity generation. Iqbal & Butt, (2015) concluded in their study such behavioral heuristics i-e overconfidence biases, optimism, being involved, loss aversion & self serving behavior with respect to risk behavior have significant impact on working capital management in Pakistan context. Moreover, Chaffi & Medhioub, (2014) concluded that such behavior has strong correlation with stock market performance.
However, such correlation with stock market is divided into two streams i-e fundamental oriented and technical oriented. And the analyses regarding these are pronounced as fundamental analysis and technical analyses. Thus, following the prospect theory by Denial Kahenamen & Mark Tversky it is concluded that financial operators are humans and they have various emotions and cognitive traits psychologically. Therefore, financial markets including stock markets are affected mainly by such behaviors that have significant correlation with stock market fundamentals. Hence, fundamental analysis is selected to test its relation with behavioral biases originated from investor's behavior or investor cognition The objective of study is to investigate the relationship of investor's behavior i-e overconfidence, optimism, involvement in stock market trading and risk attitude on investor's cognition. Moreover, the study is contextual and exploratory will reveal key implications for financial theorists, practitioners and market regulators.
Thus, the scheme of the study is that part one explains introduction, model & hypothesis, part two explains methodology, part three results and part four concludes the study findings. So the study model is as follows,

RESEARCH METHODOLOGY
The current study explores the relationship of investor's behavior and investor cognition. The population of study contains on stock market investor of Pakistan. While, sample of the study contains on Islamabad and Lahore stock exchange investors. While, simple random technique is used to acquire the data. The data is acquired through scale. And questionnaire is distributed towards 520 individuals. Thus, the response is returned from 447 investors. So the study response rate is 85.9%.
And regarding instrumentation study has used descriptive statistics, data reliability test, correlation analyses, regression analyses and combined sample t-test respectively. While, the variables are measured on seven point likert scale and scale is adopted from the study of (Iqbal & Butt, 2015). And demographic variables are taken as control variables of the study because of their significance at every level in Pakistani context (Huang, & Van De Vliert, 2003).    The table four explains the results of correlation analysis where beta and t stats values are plotted separately. Thus, OCB is found significant at significance level 0.01, INB is also found significant, OPB is found significant with fundamental analysis of stock market and RB is also found significant with fundamental analyses at p<(0.01). Thus, the value of adjusted r-square is 0.00247 and r-square as 0.047 respectively. Moreover, the greater percentages of pairs are in higher side that also shows the matter of significance between pairs.

CONCLUSION
The current study explored the relationship of behavioral short cuts with stock market fundamental analysis and results have shown the significant correlation of overconfidence behavior, optimistic behavior, involvement behavior and risk behavior with sock market fundamental analysis. Thus, the study had shown its findings significant with historic investigations. Moreover, market practitioners have to develop principles for such fundamentals that may reduce such behavior incorporation in technical moves of stock markets. And it is recommended for future investigation to investigate such behaviors with stock market technical analysis.