Financial Analyst Characteristics and Herding Behavior in Forecasting Academic Article

abstract

• This study classifies analysts' earnings forecasts as herding or bold and finds that (1) boldness likelihood increases with the analyst's prior accuracy, brokerage size, and experience and declines with the number of industries the analyst follows, consistent with theory linking boldness with career concerns and ability; (2) bold forecasts are more accurate than herding forecasts; and (3) herding forecast revisions are more strongly associated with analysts' earnings forecast errors (actual earnings - forecast) than are bold forecast revisions. Thus, bold forecasts incorporate analysts' private information more completely and provide more relevant information to investors than herding forecasts.

authors

• Tse, Senyo

altmetric score

• 3

author list (cited authors)

• CLEMENT, M. B., & TSE, S. Y

citation count

• 538

complete list of authors

• CLEMENT, MICHAEL B||TSE, SENYO Y

publication date

• January 2005

publisher

• Wiley  Publisher

published in

• The Journal of Finance  Journal

Digital Object Identifier (DOI)

• 10.1111/j.1540-6261.2005.00731.x

start page

• 307

end page

• 341

volume

• 60

issue

• 1

URL

• http%3A%2F%2Fdx.doi.org%2F10.1111%2Fj.1540-6261.2005.00731.x