scholarly journals The Role of Anchoring Bias in the Equity Market: Evidence from Analysts' Earnings Forecasts and Stock Returns

2011 ◽  
Author(s):  
Ling Cen ◽  
Gilles Hilary ◽  
K. C. John Wei
Keyword(s):  
Stock Returns ◽  
Earnings Forecasts ◽  
Equity Market ◽  
Anchoring Bias

scholarly journals The Role of Anchoring Bias in the Equity Market: Evidence from Analysts’ Earnings Forecasts and Stock Returns

2012 ◽  
Vol 48 (1) ◽  
pp. 47-76 ◽  
Author(s):  
Ling Cen ◽  
Gilles Hilary ◽  
K. C. John Wei
Keyword(s):  
Stock Returns ◽  
Earnings Forecasts ◽  
Equity Market ◽  
Stock Splits ◽  
Forecast Errors ◽  
Forecast Revisions ◽  
Earnings Per Share ◽  
Earnings Surprises ◽  
Anchoring Bias

AbstractWe test the implications of anchoring bias associated with forecast earnings per share (FEPS) for forecast errors, earnings surprises, stock returns, and stock splits. We find that analysts make optimistic (pessimistic) forecasts when a firm’s FEPS is lower (higher) than the industry median. Further, firms with FEPS greater (lower) than the industry median experience abnormally high (low) future stock returns, particularly around subsequent earnings announcement dates. These firms are also more likely to engage in stock splits. Finally, split firms experience more positive forecast revisions, more negative forecast errors, and more negative earnings surprises after stock splits.

The Role of Anchoring Bias in the Equity Market

2010 ◽  
Author(s):  
Ling Cen ◽  
Gilles Hilary ◽  
K. C. John Wei ◽  
Jie Zhang
Keyword(s):  
Equity Market ◽  
Anchoring Bias

Whose Disagreement Matters? Household Belief Dispersion and Stock Trading Volume

2021 ◽  
Author(s):  
Dan Li ◽  
Geng Li
Keyword(s):  
Stock Returns ◽  
Cross Section ◽  
Trading Volume ◽  
Positive Relationship ◽  
Theoretical Models ◽  
Equity Market ◽  
Stock Trading ◽  
Trading Activities ◽  
The Cross

Abstract Theoretical models have long recognized the role of investor disagreements in the marketplace, but little evidence is documented regarding how belief dispersion affects trading activities in the broad equity market. Using over three decades of data from a survey of US households, we introduced a novel measure of household macroeconomic belief dispersion and document its positive relationship with market-wide stock trading volume, even after controlling for an array of professional analysts’ belief dispersion. Results are more pronounced for the belief dispersion among households who are more likely to own stocks. Furthermore, we show that the household belief dispersion is priced in the cross-section of stock returns, whereas that among professional analysts is not.

The role of buy-side anchoring bias: Evidence from the real estate market

2016 ◽  
Vol 38 ◽  
pp. 34-58 ◽  
Author(s):  
Chuang-Chang Chang ◽  
Ching-Hsiang Chao ◽  
Jin-Huei Yeh
Keyword(s):  
Real Estate ◽  
Real Estate Market ◽  
The Real ◽  
The Real Estate ◽  
The Real Estate Market ◽  
Anchoring Bias

scholarly journals French Firms and COVID-19: Do the Debt Status, Crisis Management System, and Monetary Policy Play a Role?

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Mina Sami
Keyword(s):  
Monetary Policy ◽  
Stock Returns ◽  
Crisis Management ◽  
Management System ◽  
Daily Growth ◽  
Listed Firms ◽  
Study Results ◽  
Major Outbreak

Abstract This study has two main objectives: first, it assesses the effect of outbreak pandemic diseases on the French firms’ stock returns by considering the sector of activity as the main center of analysis. Second, it investigates the role of the crisis management system, firm debt strategy, and monetary policy in dealing with the adverse shocks of the major outbreak of the COVID-19. The study results can be summarized as follows: (1) the daily growth in COVID-19 cases and deaths are associated with lower stock returns of the listed firms, especially for the firms operating in the energy, industrial and health care sectors. In contrast, telecommunication and consumer sectors are not significantly affected. (2) The pandemic’s adverse effect is much more tolerant with the French firms with an efficient crisis management system and low long-term debt commitments than the firms that do not have such a system and engaged with long term debts. (3) Euribor rates and monetary policy are still playing an essential role during the pandemic period.

Estimating defaults in organized security lending markets

2016 ◽  
Vol 24 (3) ◽  
pp. 343-362
Author(s):  
Latif Cem Osken ◽  
Ceylan Onay ◽  
Gözde Unal
Keyword(s):  
Credit Risk ◽  
Stock Returns ◽  
Stock Price ◽  
Price Volatility ◽  
Equity Market ◽  
Ordinary Least Squares ◽  
Least Squares Regression ◽  
Content Type ◽  
Central Counterparties ◽  
Risk Determinants

Purpose This paper aims to analyze the dynamics of the security lending process and lending markets to identify the market-wide variables reflecting the characteristics of the stock borrowed and to measure the credit risk arising from lending contracts. Design/methodology/approach Using the data provided by Istanbul Settlement and Custody Bank on the equity lending contracts of Securities Lending and Borrowing Market between 2010 and 2012 and the data provided by Borsa Istanbul on Equity Market transactions for the same timeframe, this paper analyzes whether stock price volatility, stock returns, return per unit amount of risk and relative liquidity of lending market and equity market affect the defaults of lending contracts by using both linear regression and ordinary least squares regression for robustness and proxying the concepts of relative liquidity, volatility and return constructs by more than variable to correlate findings. Findings The results illustrate a statistically significant relationship between volatility and the default state of the lending contracts but fail to establish a connection between default states and stock returns or relative liquidity of markets. Research limitations/implications With the increasing pressure for clearing security lending contracts in central counterparties, it is imperative for both central counterparties and regulators to be able to precisely measure the risk exposure due to security lending transactions. The results gained from a limited set of lending transactions merit further studies to identify non-borrower and non-systemic credit risk determinants. Originality/value This is the first study to analyze the non-borrower and non-systemic credit risk determinants in security lending markets.

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