Does Forecast Bias Affect Financial Analysts Market Influence PDF Download
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Author | : Sami Keskek |
Publisher | : |
Total Pages | : 44 |
Release | : 2019 |
Genre | : |
ISBN | : |
Download Does Forecast Bias Affect Financial Analysts' Market Influence? Book in PDF, ePub and Kindle
Prior studies find that analysts tend to bias their forecasts upward in poor information environments and downward in rich information environments, consistent with attempts to curry favor with management. We find that investors anticipate this behavior by reducing their response to upward forecasts in poor information environments and downward forecasts in rich information environments. Using Hugon and Muslu's measure of analyst conservatism as an ex ante indicator of individual analysts' forecast bias tendencies, we show that the stronger return response they find to conservative analysts' forecast revisions is restricted to poor information environments, where optimistic analyst bias is prevalent. Our results suggest that analysts pay a price in market influence when their forecasts reinforce analysts' typical forecast bias for the firm's information environment. Conversely, analysts whose forecasts conflict with the typical bias for the firm are rewarded with larger than average return responses.
Author | : Sundaresh Ramnath |
Publisher | : Now Publishers Inc |
Total Pages | : 125 |
Release | : 2008 |
Genre | : Business & Economics |
ISBN | : 1601981627 |
Download Financial Analysts' Forecasts and Stock Recommendations Book in PDF, ePub and Kindle
Financial Analysts' Forecasts and Stock Recommendations reviews research related to the role of financial analysts in the allocation of resources in capital markets. The authors provide an organized look at the literature, with particular attention to important questions that remain open for further research. They focus research related to analysts' decision processes and the usefulness of their forecasts and stock recommendations. Some of the major surveys were published in the early 1990's and since then no less than 250 papers related to financial analysts have appeared in the nine major research journals that we used to launch our review of the literature. The research has evolved from descriptions of the statistical properties of analysts' forecasts to investigations of the incentives and decision processes that give rise to those properties. However, in spite of this broader focus, much of analysts' decision processes and the market's mechanism of drawing a useful consensus from the combination of individual analysts' decisions remain hidden in a black box. What do we know about the relevant valuation metrics and the mechanism by which analysts and investors translate forecasts into present equity values? What do we know about the heuristics relied upon by analysts and the market and the appropriateness of their use? Financial Analysts' Forecasts and Stock Recommendations examines these and other questions and concludes by highlighting area for future research.
Author | : Claudia Qi |
Publisher | : |
Total Pages | : 45 |
Release | : 2014 |
Genre | : |
ISBN | : |
Download Incentives Or Irrationality? International Evidence from the Impact of Individualism on Analyst Forecast Bias Book in PDF, ePub and Kindle
Based on a unique dataset that identifies the locations of 19,832 financial analysts covering 21,885 firms from 49 countries during 1996-2013, we find that individualism of analysts' country of residence is negatively associated with their earnings forecast optimism and positively associated with their forecast accuracy. Using multiple proxies for economic incentives and cognitive biases, we find that individualism affects analyst forecast optimism and accuracy through the economic incentives that analysts face, rather than their cognitive biases (irrationality). Our results highlight the importance for regulators and investors to factor in culture values when battling against biased analyst research.
Author | : Yasuyuki Fuchita |
Publisher | : Brookings Institution Press |
Total Pages | : 216 |
Release | : 2007-02-01 |
Genre | : Business & Economics |
ISBN | : 0815729820 |
Download Financial Gatekeepers Book in PDF, ePub and Kindle
A Brookings Institution Press and Nomura Institute of Capital Markets Research publication Developed country capital markets have devised a set of institutions and actors to help provide investors with timely and accurate information they need to make informed investment decisions. These actors have become known as "financial gatekeepers" and include auditors, financial analysts, and credit rating agencies. Corporate financial reporting scandals in the United States and elsewhere in recent years, however, have called into question the sufficiency of the legal framework governing these gatekeepers. Policymakers have since responded by imposing a series of new obligations, restrictions, and punishments—all with the purpose of strengthening investor confidence in these important actors. Financial Gatekeepers provides an in-depth look at these new frameworks, especially in the United States and Japan. How have they worked? Are further refinements appropriate? These are among the questions addressed in this timely and important volume. Contributors include Leslie Boni (University of New Mexico), Barry Bosworth (Brookings Institution), Tomoo Inoue (Seikei University), Zoe-Vonna Palmrose (University of Southern California), Frank Partnoy (University of San Diego School of Law), George Perry (Brookings Institution), Justin Pettit (UBS), Paul Stevens (Investment Company Institute), Peter Wallison (American Enterprise Institute).
Author | : National Research Council |
Publisher | : National Academies Press |
Total Pages | : 136 |
Release | : 2010-02-15 |
Genre | : Technology & Engineering |
ISBN | : 0309116600 |
Download Persistent Forecasting of Disruptive Technologies Book in PDF, ePub and Kindle
Technological innovations are key causal agents of surprise and disruption. In the recent past, the United States military has encountered unexpected challenges in the battlefield due in part to the adversary's incorporation of technologies not traditionally associated with weaponry. Recognizing the need to broaden the scope of current technology forecasting efforts, the Office of the Director, Defense Research and Engineering (DDR&E) and the Defense Intelligence Agency (DIA) tasked the Committee for Forecasting Future Disruptive Technologies with providing guidance and insight on how to build a persistent forecasting system to predict, analyze, and reduce the impact of the most dramatically disruptive technologies. The first of two reports, this volume analyzes existing forecasting methods and processes. It then outlines the necessary characteristics of a comprehensive forecasting system that integrates data from diverse sources to identify potentially game-changing technological innovations and facilitates informed decision making by policymakers. The committee's goal was to help the reader understand current forecasting methodologies, the nature of disruptive technologies and the characteristics of a persistent forecasting system for disruptive technology. Persistent Forecasting of Disruptive Technologies is a useful text for the Department of Defense, Homeland Security, the Intelligence community and other defense agencies across the nation.
Author | : Stan Beckers |
Publisher | : |
Total Pages | : |
Release | : 2004 |
Genre | : |
ISBN | : |
Download Bias in European Analysts' Earnings Forecasts Book in PDF, ePub and Kindle
Forecasting company earnings is a difficult and hazardous task. In an efficient market where analysts learn from past mistakes, there should be no persistent and systematic biases in consensus earnings accuracy. Previous research has already established how some (single) individual-company characteristics systematically influence forecast accuracy. So far, however, the effect on consensus earnings biases of a company's sector and country affiliation combined with a range of other fundamental characteristics has remained largely unexplored. Using data for 1993-2002, this article disentangles and quantifies for a broad universe of European stocks how the number of analysts following a stock, the dispersion of their forecasts, the volatility of earnings, the sector and country classification of the covered company, and its market capitalization influence the accuracy of the consensus earnings forecast.
Author | : United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs |
Publisher | : |
Total Pages | : 136 |
Release | : 2004 |
Genre | : Business & Economics |
ISBN | : |
Download The Impact of the Global Settlement Book in PDF, ePub and Kindle
Author | : Beverly R. Walther |
Publisher | : |
Total Pages | : |
Release | : 2014 |
Genre | : |
ISBN | : |
Download Does Investor Sentiment Affect Sell-Side Analysts' Forecast Bias and Forecast Accuracy Book in PDF, ePub and Kindle
We examine the association between investor expectations and its components and sell-side analysts' short-run quarterly earnings forecast bias and forecast accuracy. To measure investor expectations, we use the Index of Consumer Expectations (ICE) survey and decompose it into the “fundamental” component related to underlying economic factors (FUND) and the “sentiment” component unrelated to underlying economic factors (SENT). We find that analysts are the most optimistic and the least accurate when SENT is higher. Management long-horizon earnings forecasts attenuate the effects of SENT on forecast optimism and forecast accuracy. Analysts are also the most accurate when FUND is higher. Last, the market places more weight on unexpected earnings when SENT is high. These findings suggest that analysts are affected by investor sentiment and the market reacts more strongly to unexpected earnings when analyst forecasts are the least accurate. The last result potentially explains why prior research (for example, Baker and Wurgler 2006) finds an association between investor sentiment and cross-sectional stock returns.
Author | : Charles F. Manski |
Publisher | : Princeton University Press |
Total Pages | : 184 |
Release | : 2019-09-10 |
Genre | : Business & Economics |
ISBN | : 0691194734 |
Download Patient Care Under Uncertainty Book in PDF, ePub and Kindle
For the past few years, the author, a renowned economist, has been applying the statistical tools of economics to decision making under uncertainty in the context of patient health status and response to treatment. He shows how statistical imprecision and identification problems affect empirical research in the patient-care sphere.
Author | : Seung-Woog Kwag |
Publisher | : |
Total Pages | : 110 |
Release | : 2002 |
Genre | : |
ISBN | : |
Download Are Markets Rational? Book in PDF, ePub and Kindle