Learning, Portfolio Complexity and Informational Asymmetry in Forecasts of Sell-Side Analysts

The aim of this study was to analyze the association of learning and complexity in the target price forecasts and sell-side analysts’ recommendations on the BM&FBovespa. The sample comprised forecasts of 195 stocks, 75 brokers and 569 analysts between 2005 and 2013, analyzed by linear models...

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Autor principal:	Melquiades Pereira de Lima Júnior
Formato:	article
Lenguaje:	EN PT
Publicado:	FUCAPE Business School 2017
Materias:	financial analysts target price forecast stock recommendations learning portfolio complexity Business HF5001-6182
Acceso en línea:	https://doaj.org/article/cd9f97ac1458418ba86f2154cb19e3d6
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spelling	oai:doaj.org-article:cd9f97ac1458418ba86f2154cb19e3d62021-11-11T15:48:07ZLearning, Portfolio Complexity and Informational Asymmetry in Forecasts of Sell-Side Analysts1807-734Xhttps://doaj.org/article/cd9f97ac1458418ba86f2154cb19e3d62017-01-01T00:00:00Zhttp://www.redalyc.org/articulo.oa?id=123050102001https://doaj.org/toc/1807-734XThe aim of this study was to analyze the association of learning and complexity in the target price forecasts and sell-side analysts’ recommendations on the BM&FBovespa. The sample comprised forecasts of 195 stocks, 75 brokers and 569 analysts between 2005 and 2013, analyzed by linear models with panel data. Our results suggest that the experience with the stock, with the sector and complexity of the portfolio confirmed the learn by doing, but the overall experience showed contradictions due to information asymmetry. Despite anchoring in their peers, analysts achieved significant returns, but showed forecasts with low accuracy. Therfore, we concluded that more experienced analysts may intentionally contradict themselves in an attempt to bias the market. Finally, we suggest the development of less biased analyst rankings in order to increase the competitiveness and quality in the results of the analyzesThe aim of this study was to analyze the association of learning and complexity in the target price forecasts and sell-side analysts’ recommendations on the BM&FBovespa. The sample comprised forecasts of 195 stocks, 75 brokers and 569 analysts between 2005 and 2013, analyzed by linear models with panel data. Our results suggest that the experience with the stock, with the sector and complexity of the portfolio confirmed the learn by doing, but the overall experience showed contradictions due to information asymmetry. Despite anchoring in their peers, analysts achieved significant returns, but showed forecasts with low accuracy. Therfore, we concluded that more experienced analysts may intentionally contradict themselves in an attempt to bias the market. Finally, we suggest the development of less biased analyst rankings in order to increase the competitiveness and quality in the results of the analyzes.Melquiades Pereira de Lima JúniorFUCAPE Business Schoolarticlefinancial analyststarget price forecaststock recommendationslearningportfolio complexityBusinessHF5001-6182ENPTBBR: Brazilian Business Review, Vol 14, Iss 2, Pp 133-159 (2017)
institution	DOAJ
collection	DOAJ
language	EN PT
topic	financial analysts target price forecast stock recommendations learning portfolio complexity Business HF5001-6182
spellingShingle	financial analysts target price forecast stock recommendations learning portfolio complexity Business HF5001-6182 Melquiades Pereira de Lima Júnior Learning, Portfolio Complexity and Informational Asymmetry in Forecasts of Sell-Side Analysts
description	The aim of this study was to analyze the association of learning and complexity in the target price forecasts and sell-side analysts’ recommendations on the BM&FBovespa. The sample comprised forecasts of 195 stocks, 75 brokers and 569 analysts between 2005 and 2013, analyzed by linear models with panel data. Our results suggest that the experience with the stock, with the sector and complexity of the portfolio confirmed the learn by doing, but the overall experience showed contradictions due to information asymmetry. Despite anchoring in their peers, analysts achieved significant returns, but showed forecasts with low accuracy. Therfore, we concluded that more experienced analysts may intentionally contradict themselves in an attempt to bias the market. Finally, we suggest the development of less biased analyst rankings in order to increase the competitiveness and quality in the results of the analyzesThe aim of this study was to analyze the association of learning and complexity in the target price forecasts and sell-side analysts’ recommendations on the BM&FBovespa. The sample comprised forecasts of 195 stocks, 75 brokers and 569 analysts between 2005 and 2013, analyzed by linear models with panel data. Our results suggest that the experience with the stock, with the sector and complexity of the portfolio confirmed the learn by doing, but the overall experience showed contradictions due to information asymmetry. Despite anchoring in their peers, analysts achieved significant returns, but showed forecasts with low accuracy. Therfore, we concluded that more experienced analysts may intentionally contradict themselves in an attempt to bias the market. Finally, we suggest the development of less biased analyst rankings in order to increase the competitiveness and quality in the results of the analyzes.
format	article
author	Melquiades Pereira de Lima Júnior
author_facet	Melquiades Pereira de Lima Júnior
author_sort	Melquiades Pereira de Lima Júnior
title	Learning, Portfolio Complexity and Informational Asymmetry in Forecasts of Sell-Side Analysts
title_short	Learning, Portfolio Complexity and Informational Asymmetry in Forecasts of Sell-Side Analysts
title_full	Learning, Portfolio Complexity and Informational Asymmetry in Forecasts of Sell-Side Analysts
title_fullStr	Learning, Portfolio Complexity and Informational Asymmetry in Forecasts of Sell-Side Analysts
title_full_unstemmed	Learning, Portfolio Complexity and Informational Asymmetry in Forecasts of Sell-Side Analysts
title_sort	learning, portfolio complexity and informational asymmetry in forecasts of sell-side analysts
publisher	FUCAPE Business School
publishDate	2017
url	https://doaj.org/article/cd9f97ac1458418ba86f2154cb19e3d6
work_keys_str_mv	AT melquiadespereiradelimajunior learningportfoliocomplexityandinformationalasymmetryinforecastsofsellsideanalysts
_version_	1718433921210777600

Learning, Portfolio Complexity and Informational Asymmetry in Forecasts of Sell-Side Analysts

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