Download or read book Does the Scope of Sell Side Analyst Industry Matter An Examination of Bias Accuracy and Information Content of Analyst Reports written by Kenneth J. Merkley and published by . This book was released on 2016 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: Despite broad interest in analysts' activities, our understanding of sell-side analysts as a collective group is limited. This paper examines changes in the scope of the sell-side analyst industry and whether these changes impact information dissemination. Changes in the number of analysts covering an industry affect analyst competition and have significant spillover effects. When some firms in an industry experience drops in analyst coverage, the aggregate quality of the analyst reports of other firms in an industry (i.e., firms that did not experience a direct change in analyst coverage) decreases along several dimensions: analysts' forecasts are less accurate and more biased, they exert less effort, and their reports have lower information convergence and provide less information to market participants. We further find that the effects of changes in the number of analysts covering an industry are more pronounced in settings where analyst competition is more important. The spill-over industry effects we find are incremental to the effects of firm level changes in analyst coverage. Overall, having a more significant sell-side analyst industry presence has positive externalities that can result in better functioning capital markets.

Download or read book Handbook Of Financial Econometrics Mathematics Statistics And Machine Learning In 4 Volumes written by Cheng Few Lee and published by World Scientific. This book was released on 2020-07-30 with total page 5053 pages. Available in PDF, EPUB and Kindle. Book excerpt: This four-volume handbook covers important concepts and tools used in the fields of financial econometrics, mathematics, statistics, and machine learning. Econometric methods have been applied in asset pricing, corporate finance, international finance, options and futures, risk management, and in stress testing for financial institutions. This handbook discusses a variety of econometric methods, including single equation multiple regression, simultaneous equation regression, and panel data analysis, among others. It also covers statistical distributions, such as the binomial and log normal distributions, in light of their applications to portfolio theory and asset management in addition to their use in research regarding options and futures contracts.In both theory and methodology, we need to rely upon mathematics, which includes linear algebra, geometry, differential equations, Stochastic differential equation (Ito calculus), optimization, constrained optimization, and others. These forms of mathematics have been used to derive capital market line, security market line (capital asset pricing model), option pricing model, portfolio analysis, and others.In recent times, an increased importance has been given to computer technology in financial research. Different computer languages and programming techniques are important tools for empirical research in finance. Hence, simulation, machine learning, big data, and financial payments are explored in this handbook.Led by Distinguished Professor Cheng Few Lee from Rutgers University, this multi-volume work integrates theoretical, methodological, and practical issues based on his years of academic and industry experience.

Download or read book On the Methodology of Financial Economics written by Kavous Ardalan and published by Edward Elgar Publishing. This book was released on 2023-06-01 with total page 305 pages. Available in PDF, EPUB and Kindle. Book excerpt: Utilizing a multi-paradigmatic approach in considering the scientific methodology of mainstream financial economics, and suggesting improvements, this book identifies eleven biases of the scientific methodology of mainstream financial economics, namely: intellectual bias, local bias, fad bias, ideological bias, automaticity bias, confirmation bias, cultural bias, stereotyping bias, under-productivity bias, homogeneity bias, and isolation bias.

Download or read book Equity Home Bias in International Finance written by Kavous Ardalan and published by Routledge. This book was released on 2019-05-17 with total page 243 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides a comprehensive and critical analysis of research outcomes on the equity home bias puzzle – that people overinvest in domestic stocks relative to the theoretically optimal investment portfolio. It introduces place attachment – the bonding that occurs between individuals and their meaningful environments – as a new explanation for equity home bias, and presents a philosophically multi-paradigmatic view of place attachment. For the first time, a comprehensive and up-to-date review of the extant literature is provided, demonstrating that place attachment is a contributing factor to 22 different topics in which variations of home bias are present. The author also analyses the social-psychological underpinnings of place attachment, and considers the effect of multi-culturalism on the future of equity home bias. The book’s unique approach discusses the issues in conceptual terms rather than through data and statistical methods. This multi- and inter-disciplinary book is an invaluable resource for graduate students and researchers interested in economics, finance, philosophy, and/or methodology, introducing them to a new line of research.

Download or read book Essays on Sell Side Analysts written by Sang-Mook Lee and published by . This book was released on 2014 with total page 98 pages. Available in PDF, EPUB and Kindle. Book excerpt: Broadly, this study focuses on roles of sell-side analysts and examines the determinants and consequences of information discovery and stock timing roles by sell-side analysts. We also re-examine reiterations of prior recommendations by sell-side analysts. In Chapter 1, the contribution is to document that analysts add value by engaging in discovery of private information and this value addition is greater than that due to interpretation of public news or stock timing. The innovation in this Chapter is to read over 3,700 analyst reports from Investext and explicitly identify whether the report contains discovery, interpretation, and/or timing. Analysts discover new information by talking to management sources (personal meetings, investor meetings, and conference calls) or non-management sources (such as channel checks). We find that information discovery is prevalent in 17% of the reports. The cumulative abnormal return (CAR) for reports containing discovery are 6.3% for upgrades and -10.6% for downgrades. The CARs are higher for reports containing discovery relative to those containing interpretation or timing. We find that economic determinants predict whether a report will contain discovery. Discovery from management sources is more likely for reports in the pre-Reg FD period and for reports by optimistic analysts. Discovery from non-management sources is more likely for reports written by All-Star analysts, and for firms that have high information asymmetry and those that are followed by more analysts. In Chapter 2, the contribution is to introduce and document a third role that analysts play that is also valuable to investors, which we term "stock timing." Specifically, we define a timing report as one where the analyst revises his recommendation but does not revise the Price Target or any of the 23 fundamental drivers of stock price (such as EPS, FCF) tracked by I/B/E/S. Because the analyst maintains the same price target as in his prior report but still revises his recommendation, such timing calls are contrarian valuation calls. Analysts issue timing downgrades (upgrades) in response to price increases (declines) since the release of their prior report on the firm. 30% of all revisions are timing reports, indicating the importance of the timing role played by analysts. If analysts have timing ability, then markets should react to the release of the timing report and we should observe that economic determinants explain the cross-sectional variation in timing ability. We find the 3-day announcement return is over 2% in magnitude, 62% of the reports are winners (have announcement returns that have the correct sign), 10% of the reports are large enough to be considered influential, and 37% of the reports are persistent winners. These results suggest that analysts have timing ability. The ability to time is similar is magnitude to information interpretation but smaller compared to information discovery. We find considerable cross-sectional and time-series variation in timing ability. We find that the probability of issuing a timing report is positively related to the opportunities to time the stock provided by potential mispricing. Conditional on issuing a timing report, the probability of issuing a winner, an influential winner, or a persistent winner is positively related to analyst experience and negatively related to the costs associated with issuing a timing report. In Chapter 3, we document that recommendation reiterations are not homogeneous and there is a large subset of reiterations that are as much valued by investors as recommendation revisions. We combine Detail History file containing the measures tracked by I/B/E/S (Price Target, EPS, etc.) and Recommendation file to create the full time series of recommendations (initiations, reiterations, and revisions) made by each analyst for each firm for 14 years from 1999 to 2012. By adopting a modified version of "filling in the holes" method, we find that recommendation reiterations are prevalent, consisting of about 80% of recommendations for our 14-year sample period. Second, market response to recommendation reiterations increases monotonically from Reiteration: Strong Sell to Reiteration: Strong Buy. Third, reiterations coupled with contemporary changes in price targets and/or earning forecasts bring substantial absolute abnormal stock returns to investors. Lastly, when we replicate what Loh and Stulz (2011), we find that the number of reiterations which are influential is more than twice that of recommendation revisions that are influential.

Download or read book Conflicts of Interest in Sell Side Analyst Research written by Leonard Witteler and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis examines the impact of NASD 2711, NYSE 472 and of the Global Analyst Research Settlement Agreement between US regulators and ten of the biggest brokerage houses in the US underwriting industry on sell-side analyst research and the mitigation of conflicts of interest with the investment banking department. Using the full dataset of 163,026 sell-side analyst reports on S&P 500 companies published on the Investext database between November 2000 and December 2004, I document changes in analyst and investor behavior following the regulations. In line with prior evidence on changing rating distributions, I find that actual analyst sentiment also becomes more pessimistic. This effect is more pronounced for sanctioned brokerage houses, while not sanctioned, but also regulated brokerage houses do not react more than the unregulated control group. Market reactions to analyst reports are stronger following the regulations, suggesting a restoration of investor confidence in such information as hoped for by the regulator. Investors do not adjust for the cross-sectional differences in report sentiment of the sanctioned brokerage houses. They react less to research published by the sanctioned brokerage houses, as well as the other regulated brokerage houses, suggesting the existence of trust issues after the regulations. The findings have important ramifications for policy making in the financial industry, suggesting that the sanctions should have been extended to more than the biggest brokerage houses. In an additional test, I find that inconsistency between report sentiment and the quantitative summary measures is more pronounced for analyst reports with conflict of interest issues, both before and after the regulations, and even in research where conflicts of interest are not easily observable to the reader at the time of publishing. The findings suggest that sentiment-rating inconsistency can be used to identify conflicts of i.

Download or read book Strengthening Forensic Science in the United States written by National Research Council and published by National Academies Press. This book was released on 2009-07-29 with total page 348 pages. Available in PDF, EPUB and Kindle. Book excerpt: Scores of talented and dedicated people serve the forensic science community, performing vitally important work. However, they are often constrained by lack of adequate resources, sound policies, and national support. It is clear that change and advancements, both systematic and scientific, are needed in a number of forensic science disciplines to ensure the reliability of work, establish enforceable standards, and promote best practices with consistent application. Strengthening Forensic Science in the United States: A Path Forward provides a detailed plan for addressing these needs and suggests the creation of a new government entity, the National Institute of Forensic Science, to establish and enforce standards within the forensic science community. The benefits of improving and regulating the forensic science disciplines are clear: assisting law enforcement officials, enhancing homeland security, and reducing the risk of wrongful conviction and exoneration. Strengthening Forensic Science in the United States gives a full account of what is needed to advance the forensic science disciplines, including upgrading of systems and organizational structures, better training, widespread adoption of uniform and enforceable best practices, and mandatory certification and accreditation programs. While this book provides an essential call-to-action for congress and policy makers, it also serves as a vital tool for law enforcement agencies, criminal prosecutors and attorneys, and forensic science educators.

Download or read book Bulletin of the Atomic Scientists written by and published by . This book was released on 1955-04 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Bulletin of the Atomic Scientists is the premier public resource on scientific and technological developments that impact global security. Founded by Manhattan Project Scientists, the Bulletin's iconic "Doomsday Clock" stimulates solutions for a safer world.

Download or read book Research for Sale written by Marcus Kirk and published by . This book was released on 2013 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: I examine the determinants and market impact of paid-for coverage using a hand-collected sample of paid-for reports over 1999ndash;2006. More than five hundred publicly listed US companies paid for analyst coverage since 1999. Yet little is known about the informational consequences of this analyst research. Firms with greater uncertainty, weaker information environments, and low turnover are more likely to buy coverage as they have the most to gain from analyst coverage but are unlikely to attract sell-side analysts. Despite the inherent conflicts of interest, I find paid-for reports have information content for investors based on two-day abnormal returns. After the initiation of coverage, companies experience an increase in institutional ownership, sell-side analyst following, and liquidity. In addition, the results are strongest for the fee-based research firm with ex ante policies that reduce potential conflicts of interest.

Download or read book The Revolving Door of Sell Side Analysts written by Ben Lourie and published by . This book was released on 2019 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: Equity analysts are often hired by firms they cover. I document the extent to which this revolving door phenomenon impairs analysts' independence. I do this by examining the presence of biased research reports issued during the year before analysts are employed by a firm they cover. I find that during their final year, revolving door analysts bias their EPS forecasts, their target prices, and their recommendations in a direction that suggests that they are attempting to gain favor from their prospective employers. Specifically, relative to other analysts, revolving door analysts issue more optimistic reports on the firms that hire them, and they issue more pessimistic reports on firms that do not hire them. These results suggest the presence of strategic bias, although more innocuous interpretations cannot be completely ruled out.

Download or read book Social Science Research written by Anol Bhattacherjee and published by CreateSpace. This book was released on 2012-04-01 with total page 156 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is designed to introduce doctoral and graduate students to the process of conducting scientific research in the social sciences, business, education, public health, and related disciplines. It is a one-stop, comprehensive, and compact source for foundational concepts in behavioral research, and can serve as a stand-alone text or as a supplement to research readings in any doctoral seminar or research methods class. This book is currently used as a research text at universities on six continents and will shortly be available in nine different languages.

Download or read book The Informational Role of Sell side Analysts Forecast Horizon written by Xuan Wang and published by . This book was released on 2019 with total page 90 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation explores the informational role of sell-side analysts' change in forecasting horizon. I find that portfolios formed by buying stocks with large increase in analyst horizon and shorting stocks with large decrease in analyst horizon generate superior future return. Horizon change has information incremental to analyst earnings forecast and recommendation revisions, as well as firm fundamentals. Large increase in horizon mainly drives the result. I find that analysts who contribute to strong horizon increase are associated with higher forecast accuracy. This increase is likely associated with the career concerns of inexperienced analysts. The return predictability associated with analyst forecast horizon change exists in the information environment of high liquidity and low volatility, at the times when analyst forecasts are the most accurate. Moreover, analyst forecast horizon is partially related to analysts' profitability prediction and firm risk assessment, although the horizon change, the component predictable by firm fundamentals notwithstanding, is still able to predict return in the short-run. Overall, the findings reported in this dissertation support the view that sell-side analysts are important rational-information providers in the financial industry.

Download or read book The Impact of Sell Side Analyst Research Coverage on an Affiliated Broker s Market Share of Trading Volume written by Greg Niehaus and published by . This book was released on 2008 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using NASDAQ reported individual stock level trading volume, we find that analyst research coverage on a stock increases an affiliated broker's market share of trading volume in that stock by 0.8 percent, on average, which corresponds to an additional annual volume of about one million shares in an average stock. Optimistic recommendations increase market share by an additional 0.4 percent, on average, which suggests that analysts have an incentive to issue upwardly biased recommendations. However, affiliated brokers receive more trading volume when recommendations are provided by analysts with better reputations and when analysts report new information to the market via coverage upgrades and downgrades. Furthermore, as the length of time during which an analyst maintains the same recommendation on a stock increases, the impact of the analyst's research coverage on the affiliated broker's market share of volume in the stock declines. The latter findings indicate that sell-side institutions are rewarded for high quality research services and for providing new information to the market.

Download or read book Does Investor Sentiment Affect Sell Side Analysts Forecast Bias and Forecast Accuracy written by Beverly R. Walther and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the association between investor expectations and its components and sell-side analysts' short-run quarterly earnings forecast bias and forecast accuracy. To measure investor expectations, we use the Index of Consumer Expectations (ICE) survey and decompose it into the “fundamental” component related to underlying economic factors (FUND) and the “sentiment” component unrelated to underlying economic factors (SENT). We find that analysts are the most optimistic and the least accurate when SENT is higher. Management long-horizon earnings forecasts attenuate the effects of SENT on forecast optimism and forecast accuracy. Analysts are also the most accurate when FUND is higher. Last, the market places more weight on unexpected earnings when SENT is high. These findings suggest that analysts are affected by investor sentiment and the market reacts more strongly to unexpected earnings when analyst forecasts are the least accurate. The last result potentially explains why prior research (for example, Baker and Wurgler 2006) finds an association between investor sentiment and cross-sectional stock returns.

Download or read book Buy Side Analysts Sell Side Analysts and Private Information Production Activities written by Gilad Livne and published by . This book was released on 2006 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the effect of coverage initiation by a sell-side analyst on the production of private information. It shows that the sell-side analyst's information production may crowd out information production by buy-side analysts. Nonetheless, coverage initiation increases the total amount of private information that is available to institutional investors. Coverage initiation may result in greater losses sustained by liquidity traders and lower information gathering costs in the economy. It may also lead to higher market liquidity and lower price efficiency. Examining investment-banking relationship within a brokerage house, it is possible that prohibiting such relationship may decrease the overall amount of information available to institutional investors and price efficiency.

Download or read book Model Rules of Professional Conduct written by American Bar Association. House of Delegates and published by American Bar Association. This book was released on 2007 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Model Rules of Professional Conduct provides an up-to-date resource for information on legal ethics. Federal, state and local courts in all jurisdictions look to the Rules for guidance in solving lawyer malpractice cases, disciplinary actions, disqualification issues, sanctions questions and much more. In this volume, black-letter Rules of Professional Conduct are followed by numbered Comments that explain each Rule's purpose and provide suggestions for its practical application. The Rules will help you identify proper conduct in a variety of given situations, review those instances where discretionary action is possible, and define the nature of the relationship between you and your clients, colleagues and the courts.

Download or read book What is the Value of Sell Side Analysts Evidence from Coverage Initiations and Terminations written by Kevin K. Li and published by . This book was released on 2015 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate three potential channels of analyst value creation: improving fundamental performance through monitoring, reducing information asymmetry, and increasing investor recognition. We show that changes in investor recognition have consistent explanatory power for the market reaction to coverage initiations and terminations but find mixed evidence for changes in information asymmetry and no evidence for changes in fundamental performance as determinants of the market reaction. These results suggest that analysts create value for firms under their coverage by improving their investor recognition and not by monitoring or reducing information asymmetry.