Download or read book Individual Investors Trading Responses to Accounting Disclosures written by Weiwei Wang and published by . This book was released on 2016 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt: A large amount of prior research that aim at understanding how individual investors respond to accounting disclosures uses transaction sizes to differentiate between small/individual and large/institutional investors. Recent studies have found that certain institutions are heavily involved in small size transactions. The analysis of individual investor trading based on transaction sizes erroneously draws inferences related to the small size transactions of institutional investors instead of transactions of individual investors. I re-investigate several fundamental issues using a comprehensive dataset of individual investor trading on the NYSE. First, I find that for individual investors there is a high concentration of trading around the earnings announcements and that the concentration is significantly higher than what is seen for the overall market. This finding is inconsistent with Cready [Journal of Accounting Research, 1-27 (1988)] which interprets the increase of the mean transaction size during the announcement periods as evidence that large/institutional investors find earnings information relatively more valuable than small/individual investors. Second, I show that individual investors’ buying is more concentrated than their selling which supports Lee [Journal of Accounting and Economics, 15(2-3), 265-302 (1992)]’s finding that individual investors are particularly prone to buying during the earnings announcement periods. Third, I do not find a significant positive association between individual investor abnormal trading and the magnitude of seasonal random-walk forecast errors during the announcement periods. This is inconsistent with Bhattacharya [The Accounting Review, 76(2), 221-244, (2001)] which shows a positive association between abnormal small size transactions and the magnitude of random-walk forecast errors, and interprets the finding as evidence that individual investors rely on seasonal random-walk model to form earnings expectations. Fourth, my analysis finds no evidence of the negative relation between 10K complexity and individual investor trading activity documented in Miller [ The Accounting Review, 85(6), 2107-2143, (2010)].
Download or read book Why Do Individual Investors Disregard Accounting Information The Roles of Information Awareness and Acquisition Costs written by Elizabeth Blankespoor and published by . This book was released on 2019 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt: Individual investors often neglect value-relevant accounting information and instead underperform by trading on technical trends. We investigate the frictions that impede individual investors' use of accounting information, and in particular their costs of monitoring and acquiring accounting disclosures. We do so using an archival setting where individuals are presented with automated media articles that report both current earnings news and past stock returns. Although these investors have earnings information readily available, we find no evidence that their trades incorporate earnings news. Instead we find that they trade in response to the trailing stock returns presented in the articles. Our study raises questions about the likely efficacy of regulations that aim to aid less sophisticated investors by increasing their awareness of, and access to, accounting information.
Download or read book The Relative Use of Form 8 k Disclosures written by Andrew John McLelland and published by . This book was released on 2003 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Prior research suggests that the use of accounting information differs substantially by investor class. My analysis extends this line of research to the area of SEC Form 8-K filings. Prior research also provides mixed evidence on the informativeness of these filings. I hypothesize that the method of the disclosure is an important factor in evaluating 8-K usefulness to varying types of investors. Specifically, the timing, venue, and packaging of these accounting disclosures affect their use by investors. Regulation Fair Disclosure (2000) considers both press releases and 8-K filings as broad-based disclosures that do not favor any investor class. I, however, identify five unique informational settings in which 8-K filings occur. The five settings are: a concurrent 8-K event and filing (with or without a press release), a filing which precedes the press release, a press release that precedes the filing, an 8-K event that precedes a filing and/or press release, and the 8-K event alone. I examine the similarities and differences in trading by small and large investors across these settings. The identification of these empirical regularities with respect to disclosure form should be particularly useful to policy makers seeking to implement level playing field objectives with respect to public disclosures. My findings show that the relative trading activity to 8-K filings is different by the type of disclosure. Differential trading activity was found to be more pronounced in disclosure settings that contained a public announcement. In addition, the type of Form 8-K disclosure also had an effect on the differential trading activity. Form 8-K filings of acquisition or disposition of assets were associated with the most pronounced responses. My findings show the differential trading activity to these filings differs from other accounting events such as earnings announcements and annual report filings.
Download or read book Individual Investors and Financial Disclosure written by Alastair Lawrence and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Influence of Comprehensive Income Reporting on the Judgments of Nonprofessional Investors written by Roberta Lynn Humphrey and published by . This book was released on 2007 with total page 348 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: Financial statement disclosure location of other comprehensive income (OCI) and total comprehensive income is an issue under review by accounting standard setters. Disclosure location options under consideration are (1) the performance statement--thought to provide a more transparent disclosure and (2) the statement of changes in equity (SCE)--thought to provide a less transparent disclosure. Prior behavioral studies conclude that disclosure on a performance statement provides more transparency of OCI and total comprehensive income than SCE disclosure. This between-subjects study examines whether nonprofessional investors (evaluating a company with noncore business activity OCI) make differing investing decisions under alternative OCI disclosure locations (performance statement or SCE). This study's combination of characteristics (nonprofessional investors evaluating a company where OCI is produced from a noncore business activity) is previously unexplored in the current literature. Subjects were randomly drawn from the membership of the American Association of Individual Investors and 237 usable responses were returned for a 10% response rate. No difference was found in nonprofessional investors' investment decisions when manipulating noncore business activity OCI disclosure location (between the performance statement and the SCE). This finding suggests two potential conclusions regarding OCI: (1) the performance statement disclosure of OCI does not provide more transparency than SCE disclosure or (2) better OCI transparency under performance statement disclosure might have been achieved, but noncore business activity OCI was not important to nonprofessional investors in making investment decisions. Nonprofessional investors exhibited functional fixation in this study, even though the information to adjust for the difference between trading securities and available-for-sale securities was disclosed in the financial statements. Functional fixation was equally present under both financial statement disclosure locations examined, the performance statement (the presumed more transparent disclosure) and the SCE (the presumed less transparent disclosure). This study supports the accounting standard setters' concern that financial statement users rely too heavily on the figures of net income and earnings per share, at least where nonprofessional investors are concerned.
Download or read book A Guide to Econometrics written by Peter Kennedy and published by John Wiley & Sons. This book was released on 2008-02-19 with total page 608 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dieses etwas andere Lehrbuch bietet keine vorgefertigten Rezepte und Problemlösungen, sondern eine kritische Diskussion ökonometrischer Modelle und Methoden: voller überraschender Fragen, skeptisch, humorvoll und anwendungsorientiert. Sein Erfolg gibt ihm Recht.
Download or read book Accounting Disclosure and Real Effects written by Chandra Kanodia and published by Now Publishers Inc. This book was released on 2007 with total page 105 pages. Available in PDF, EPUB and Kindle. Book excerpt: Kanodia presents a new approach to the study of accounting measurement that argues that how firms' economic transactions, earnings, and capital flows are measured and reported to the capital markets has substantial effects on the firms' real decisions and on the allocation of resources.
Download or read book Winning decisions written by Kim Hua Tan and published by . This book was released on 2003 with total page 106 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Investor Behavior written by H. Kent Baker and published by John Wiley & Sons. This book was released on 2014-02-10 with total page 645 pages. Available in PDF, EPUB and Kindle. Book excerpt: WINNER, Business: Personal Finance/Investing, 2015 USA Best Book Awards FINALIST, Business: Reference, 2015 USA Best Book Awards Investor Behavior provides readers with a comprehensive understanding and the latest research in the area of behavioral finance and investor decision making. Blending contributions from noted academics and experienced practitioners, this 30-chapter book will provide investment professionals with insights on how to understand and manage client behavior; a framework for interpreting financial market activity; and an in-depth understanding of this important new field of investment research. The book should also be of interest to academics, investors, and students. The book will cover the major principles of investor psychology, including heuristics, bounded rationality, regret theory, mental accounting, framing, prospect theory, and loss aversion. Specific sections of the book will delve into the role of personality traits, financial therapy, retirement planning, financial coaching, and emotions in investment decisions. Other topics covered include risk perception and tolerance, asset allocation decisions under inertia and inattention bias; evidenced based financial planning, motivation and satisfaction, behavioral investment management, and neurofinance. Contributions will delve into the behavioral underpinnings of various trading and investment topics including trader psychology, stock momentum, earnings surprises, and anomalies. The final chapters of the book examine new research on socially responsible investing, mutual funds, and real estate investing from a behavioral perspective. Empirical evidence and current literature about each type of investment issue are featured. Cited research studies are presented in a straightforward manner focusing on the comprehension of study findings, rather than on the details of mathematical frameworks.
Download or read book Accounting and Human Information Processing written by Robert Libby and published by Prentice Hall. This book was released on 1981 with total page 234 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Information and Learning in Markets written by Xavier Vives and published by Princeton University Press. This book was released on 2010-01-25 with total page 422 pages. Available in PDF, EPUB and Kindle. Book excerpt: The ways financial analysts, traders, and other specialists use information and learn from each other are of fundamental importance to understanding how markets work and prices are set. This graduate-level textbook analyzes how markets aggregate information and examines the impacts of specific market arrangements--or microstructure--on the aggregation process and overall performance of financial markets. Xavier Vives bridges the gap between the two primary views of markets--informational efficiency and herding--and uses a coherent game-theoretic framework to bring together the latest results from the rational expectations and herding literatures. Vives emphasizes the consequences of market interaction and social learning for informational and economic efficiency. He looks closely at information aggregation mechanisms, progressing from simple to complex environments: from static to dynamic models; from competitive to strategic agents; and from simple market strategies such as noncontingent orders or quantities to complex ones like price contingent orders or demand schedules. Vives finds that contending theories like informational efficiency and herding build on the same principles of Bayesian decision making and that "irrational" agents are not needed to explain herding behavior, booms, and crashes. As this book shows, the microstructure of a market is the crucial factor in the informational efficiency of prices. Provides the most complete analysis of the ways markets aggregate information Bridges the gap between the rational expectations and herding literatures Includes exercises with solutions Serves both as a graduate textbook and a resource for researchers, including financial analysts
Download or read book The Investment Answer written by Gordon Murray and published by Business Plus. This book was released on 2011-01-12 with total page 86 pages. Available in PDF, EPUB and Kindle. Book excerpt: What if there were a way to cut through all the financial mumbo-jumbo? Wouldn't it be great if someone could really explain to us-in plain and simple English-the basics we must know about investing in order to insure our financial freedom? At last, here's good news. Jargon-free and written for all investors-experienced, beginner, and everyone in between-The Investment Answer distills the process into just five decisions-five straightforward choices that can lead to safe and sound ways to manage your money. When Wall Street veteran Gordon Murray told his good friend and financial advisor, Dan Goldie, that he had only six months to live, Dan responded, "Do you want to write that book you've always wanted to do?" The result is this eminently valuable primer which can be read and understood in one sitting, and has advice that benefits you, not Wall Street and the rest of the traditional financial services industry. The Investment Answer asks readers to make five basic but key decisions to stack the investment odds in their favor. The advice is simple, easy-to-follow, and effective, and can lead to a more profitable portfolio for every investor. Specifically: Should I invest on my own or seek help from an investment professional? How should I allocate my investments among stocks, bonds, and cash? Which specific asset classes within these broad categories should I include in my portfolio? Should I take an actively managed approach to investing, or follow a passive alternative? When should I sell assets and when should I buy more? In a world of fast-talking traders who believe that they can game the system and a market characterized by instability, this extraordinary and timely book offers guidance every investor should have.
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 Investors Really Want Know What Drives Investor Behavior and Make Smarter Financial Decisions written by Meir Statman and published by McGraw Hill Professional. This book was released on 2010-11-19 with total page 305 pages. Available in PDF, EPUB and Kindle. Book excerpt: A pioneer in the field of behavioral finance presents an investment guide based on what really drives investors Perfectly timed to give readers a real edge for investing in post-crash markets Author is a leading authority on the theory and application of behavioral finance and a fixture in The Wall Street Journal and other leading media outlets Poised to become the definitive text on how investors and managers make financial decisions—and how these decisions are reflected in financial markets
Download or read book Includes responses to questionnaire written by United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs. Subcommittee on Securities and published by . This book was released on 1972 with total page 486 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Logic of Securities Law written by Nicholas L. Georgakopoulos and published by Cambridge University Press. This book was released on 2017-05-04 with total page 215 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book opens with a simple introduction to financial markets, attempting to understand the action and the players of Wall Street by comparing them to the action and the players of main street. Firstly, it explores the definition of a security by its function, the departure from the buyer beware environment of corporate law and the entrance into the seller disclose environment of securities law. Secondly, it shows that the cost of disclosure rules is justified by their capacity to combat irrationalities, fads, and panics. The third section explains how the structure of class actions is designed to improve deterrence. Next it explores the economic harm from insider trading and how the law fights it. In sum, the book shows how all these parts of securities law serve the virtuous cycle from liquidity to accurate prices and more trading and how the great recession showed that our securities regulation reacted mostly adequately to the crisis.
Download or read book Understanding Accounting Academic Research written by Stephen R. Moehrle and published by Emerald Group Publishing. This book was released on 2013-06-25 with total page 298 pages. Available in PDF, EPUB and Kindle. Book excerpt: Accounting scandals such as Enron and WorldCom ushered in several regulatory overhauls including Sarbanes-Oxley. This monograph summarizes and synthesize a decade of academic research to develop an evolving dominant explanation around these myriad changes.
