Get 20M+ Full-Text Papers For Less Than $1.50/day. Subscribe now for You or Your Team.

Learn More →

Analyzing the Analysts: Career Concerns and Biased Earnings Forecasts

Analyzing the Analysts: Career Concerns and Biased Earnings Forecasts We examine security analysts' career concerns by relating their earnings forecasts to job separations. Relatively accurate forecasters are more likely to experience favorable career outcomes like moving up to a high‐status brokerage house. Controlling for accuracy, analysts who are optimistic relative to the consensus are more likely to experience favorable job separations. For analysts who cover stocks underwritten by their houses, job separations depend less on accuracy and more on optimism. Job separations were less sensitive to accuracy and more sensitive to optimism during the recent stock market mania. Brokerage houses apparently reward optimistic analysts who promote stocks. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Finance Wiley

Analyzing the Analysts: Career Concerns and Biased Earnings Forecasts

The Journal of Finance , Volume 58 (1) – Feb 1, 2003

Loading next page...
 
/lp/wiley/analyzing-the-analysts-career-concerns-and-biased-earnings-forecasts-ZIZNEorrJR

References (61)

Publisher
Wiley
Copyright
© American Finance Association
ISSN
0022-1082
eISSN
1540-6261
DOI
10.1111/1540-6261.00526
Publisher site
See Article on Publisher Site

Abstract

We examine security analysts' career concerns by relating their earnings forecasts to job separations. Relatively accurate forecasters are more likely to experience favorable career outcomes like moving up to a high‐status brokerage house. Controlling for accuracy, analysts who are optimistic relative to the consensus are more likely to experience favorable job separations. For analysts who cover stocks underwritten by their houses, job separations depend less on accuracy and more on optimism. Job separations were less sensitive to accuracy and more sensitive to optimism during the recent stock market mania. Brokerage houses apparently reward optimistic analysts who promote stocks.

Journal

The Journal of FinanceWiley

Published: Feb 1, 2003

There are no references for this article.