Experts' earning forecasts: bias, herding and gossamer information

@article{Guedj2004ExpertsEF,
  title={Experts' earning forecasts: bias, herding and gossamer information},
  author={Olivier Guedj and J. Bouchaud},
  journal={International Journal of Theoretical and Applied Finance},
  year={2004},
  volume={08},
  pages={933-946}
}
We study the statistics of earning forecasts of US, EU, UK and JP stocks during the period 1987–2004. We confirm, on this large data set, that financial analysts are on average over-optimistic and show a pronounced herding behavior. These effects are time dependent, and were particularly strong in the early 1990s and during the Internet bubble. We furthermore find that their forecast ability is, in relative terms, quite poor and comparable in quality, a year ahead, to the simplest "no change… Expand

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