Does Forecast Accuracy Matter to Security Analysts?

1999 ◽  
Vol 74 (2) ◽  
pp. 185-200 ◽  
Author(s):  
Michael B. Mikhail ◽  
Beverly R. Walther ◽  
Richard H. Willis
Keyword(s):  
Forecast Accuracy ◽  
Earnings Forecast ◽  
Statistical Relation ◽  
Security Analysts ◽  
Forecast Horizon ◽  
Stock Recommendations ◽  
Period Effects ◽  
Time Period ◽  
Turn Over ◽  
Relative Profitability

We investigate if earnings forecast accuracy matters to security analysts by examining its association with analyst turnover. Controlling for firm- and time-period effects, forecast horizon and industry forecasting experience, we find that an analyst is more likely to turn over if his forecast accuracy is lower than his peers. We find no association between an analyst's probability of turnover and his absolute forecast accuracy. We also investigate another observable measure of the analyst's performance, the profitability of his stock recommendations. There is no statistical relation between the absolute or relative profitability of an analyst's stock recommendations and his probability of turnover. We interpret our findings as indicating that forecast accuracy is important to analysts.

When Security Analysts Talk, Who Listens?

2007 ◽  
Vol 82 (5) ◽  
pp. 1227-1253 ◽  
Author(s):  
Michael B. Mikhail ◽  
Beverly R. Walther ◽  
Richard H. Willis
Keyword(s):  
Investment Decisions ◽  
Earnings Forecast ◽  
Security Analysts ◽  
Stock Recommendations ◽  
Security Analyst ◽  
Small Investors ◽  
Forecast Revision ◽  
Recommendation Revisions ◽  
Small Traders

Regulators' interest in analyst reports stems from the belief that small investors are unaware of the conflicts sell-side analysts face and may, as a consequence, be misled into making suboptimal investment decisions. We examine who trades on security analyst stock recommendations by extending prior research to focus on investor-specific responses to revisions. We find that both large and small traders react to analyst reports; however, large investors appear to trade more than small traders in response to the information conveyed by the analyst's recommendation and earnings forecast revision (proxied by the magnitudes of the recommendation change and the earnings forecast revision, respectively). We also find that small investors do not fully account for the effects of analysts' incentives on the credibility of analyst reports, as captured by the type of recommendation (i.e., upgrade versus downgrade or buy versus sell). In particular, small investors not only trade more than large investors following upgrade and buy recommendations, but also trade more following upgrade and buy recommendations than they do following downgrade and hold/sell recommendations. Furthermore, we observe that, on average, small traders are net purchasers following recommendation revisions regardless of the type of the recommendation; large traders tend to be net sellers following downgrades and sells. Consequently, large traders generate statistically positive returns from their trading, while small traders generate statistically negative returns from their trading. These findings are consistent with large investors being more sophisticated processors of information, and provide some support for regulators' concerns that analysts may more easily mislead small investors.

scholarly journals “Cogent Religious Instruction”: A Response to the Phenomenon of Radical Islamist Terrorism in Australia

Religions ◽  
2019 ◽  
Vol 10 (4) ◽  
pp. 246 ◽  
Author(s):  
Halim Rane
Keyword(s):  
Thinking Skills ◽  
Critical Thinking Skills ◽  
Military Interventions ◽  
Religious Instruction ◽  
Early 21St Century ◽  
Period Effects ◽  
Religious Extremism ◽  
Time Period ◽  
Islamic Jurisprudence ◽  
Islamist Terrorism

Over the past 15 years, 47 Muslim Australians have been convicted for terrorism offences. Australian courts have determined that these acts were motivated by the offenders’ “Islamic” religious beliefs and that interpretations of Quranic verses concerning jihad, in relation to shariah, caliphate, will of God and religious duty contributed to the commission of these crimes. This paper argues that these ideas, derived from certain classical-era Islamic jurisprudence and modern Islamist thought, contradict other classical-era interpretations and, arguably, the original teachings of Islam in the time of the Prophet Muhammad. In response to the call for “cogent religious instruction” to combat the phenomenon of radical Islamist terrorism, this paper outlines a deradicalization program that addresses late 20th- and early 21st-century time-period effects: (1) ideological politicization associated with Islamist jihadism; (2) religious extremism associated with Salafism; and (3) radicalization associated with grievances arising from Western military interventions in Muslim-majority countries. The paper offers a counter narrative, based on a contextualized reading of the Quran and recent research on the authentication of the Covenants of the Prophet Muhammad. It further contends that cogent religious instruction must enhance critical-thinking skills and provide evidence-based knowledge in order to undermine radical Islamist extremism and promote peaceful coexistence.

Are Aging OECD Welfare States on the Path to Gerontocracy?

2009 ◽  
Vol 29 (1) ◽  
pp. 1-28 ◽  
Author(s):  
MARKUS TEPE ◽  
PIETER VANHUYSSE
Keyword(s):  
Median Voter ◽  
Population Aging ◽  
Welfare States ◽  
Public Pension ◽  
Public Pensions ◽  
Distributive Politics ◽  
Regime Type ◽  
Welfare Regime ◽  
Period Effects ◽  
Time Period

ABSTRACTSince 1990 the age of the average OECD median voter has increased three times faster than in the preceding 30 years. We use panel data from 1980–2002 to investigate the effects of population aging on both the program size and the benefit generosity of public pensions in 18 OECD countries. Population aging is accompanied by cutting smaller slices out of larger cakes: it increases aggregate spending on pensions but freezes or decreases the generosity of individual benefits. Controlling for political, institutional and time-period effects, we find that public pension efforts are significantly mediated by welfare regime type. Moreover, since the late 1980s pension effort has more fully adopted a retrenchment logic. It is the politics of fiscal and electoral straitjackets, not gerontocracy, which shape public pension spending today. While population aging is accelerating, contrary to alarmist political economy predictions democracies are not yet dominated by a new distributive politics of elderly power.

scholarly journals CONSTANT TEMPERATURE AND TIME PERIOD EFFECTS ON ANOPHELES GAMBIAE EGG HATCHING

2007 ◽  
Vol 23 (2) ◽  
pp. 124-130 ◽  
Author(s):  
DANIEL E. IMPOINVIL ◽  
GABRIEL A. CARDENAS ◽  
JOHN I. GIHTURE ◽  
CHARLES M. MBOGO ◽  
JOHN C. BEIER
Keyword(s):  
Anopheles Gambiae ◽  
Constant Temperature ◽  
Egg Hatching ◽  
Period Effects ◽  
Time Period

The Moderating Effect of Industry Concentration on the Relations Between External Attributes and the Properties of Analyst Earnings Forecast

2013 ◽  
Vol 16 (03) ◽  
pp. 1350019 ◽  
Author(s):  
Yu-Cheng Chen ◽  
Chiung-Yao Huang ◽  
Pei-I Chou
Keyword(s):  
Forecast Accuracy ◽  
Earnings Forecasts ◽  
Moderating Effect ◽  
Industry Concentration ◽  
Earnings Forecast ◽  
Moderating Effects ◽  
Forecast Dispersion ◽  
Earnings Surprise ◽  
Using Data ◽  
Analyst Earnings

Based on the work of earlier studies, the main objective of this study is to determine whether the properties of analyst earnings forecast are related to the interaction effects of external attributes and industry concentration that were not the focus of previous research. Specifically, this study examines the relations between external attributions and the properties of analyst earnings forecasts. Furthermore, we explore the moderating effect of industry concentration on the relations between external attributions and the properties of analyst earnings forecasts. Using data from Compustat and I/B/E/S, we provide evidence that analysts' earnings forecast accuracy is lower and the forecast dispersion is larger for firms with more earnings surprise. Firms with more analysts' forecasts covering are associated with higher forecast accuracy, but not necessarily higher forecast dispersion. The moderating effects of industry concentration on the relationships between earnings surprise, the number of estimates covering the company and forecast accuracy are particularly strong. In addition, the moderating effects of industry concentration on the relationship between earnings surprise, the number of estimates covering the company and the forecast dispersion are partially supported. Overall, the industrial concentration factor either magnifies or alleviates the effect of external attributions on analyst's forecast accuracy and forecast dispersion.

Regressive Oil Price Expectations Toward More Fundamental Values of the Oil Price

2010 ◽  
Vol 230 (4) ◽  
Author(s):  
Stefan Reitz ◽  
Jan-Christoph Rülke ◽  
Georg Stadtmann
Keyword(s):  
Random Walk ◽  
Rational Expectations ◽  
Forecast Accuracy ◽  
Oil Price ◽  
Economic Forecast ◽  
Roller Coaster ◽  
Price Expectations ◽  
Oil Market ◽  
Time Period ◽  
Fundamental Values

SummaryWe use oil price forecasts from the Consensus Economic Forecast poll for the time period Oct. 1989 - Dec. 2008 to analyze how forecasters form their expectations. Our findings indicate that the extrapolative as well as the regressive expectation formation hypothesis play a role. Standard measures of forecast accuracy reveal forecasters’ under performance relative to the random walk benchmark. We test the hypothesis of rational expectations by relying on the criteria of unbiasedness and orthogonality. Although both conditions are met, the forecast accuracy is significantly lower compared to naïve random walk forecast. The forecasters have problems to forecast the trends in the oil price. The recent roller-coaster movements in the international oil market have revealed forecasters’ inability to predict major trends in the spot oil price. As a consequence, some research institutes have stopped forecasting the oil price as an ingredient of their macroeconomic models and use a random walk forecast instead.

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