دانلود رایگان مقاله الگوی خوش بینی بهترین تحلیلگران

Abstract

This paper studies what drives the change in optimism among all-star analysts. Using unique hand collected data for the entire career of all-star analysts, the paper discovers the optimism patterns in their forecasts and recommendations. One the one hand, while analysts tend to issue more optimistic estimate forecasts, they are less likely to issue optimistic recommendations after becoming all-stars. On the other hand, analysts appear to be less optimistic in terms of both estimates and recommendations after being eliminated from the all-star list. The results are significant controlling for forecast accuracy, firm coverage, and job separation effect. This is the first study to look at both the optimism pattern of all-star analysts, and the effect of demotion from all-star team on analyst optimism.

7. Conclusion

This paper seeks to unveil the optimism trend throughout the entire career of an analyst. While previous studies did not conclude a general trend of analyst optimism given their all-star status, this paper finds that analysts become more likely to give optimistic estimate forecasts after becoming all-stars. This is the first study that tests both the effects of becoming and getting eliminated from all-stars on analyst optimism change. Linking analyst behavior change to a specific career stage enables us to better interpret their earnings forecasts and recommendations in order to invest accordingly. Some potentially related areas such as why analysts become more optimistic after these events are left for future research.