Stock Analysts Efficiency in a Tournament Structure : The Impact of Analysts Picking a Winner and a Loser

A financial analyst who can give accurate return predictions is highly valued. This study uses a unique data set comparing CNBC's Fast Money's ‘March Madness' stock picks as a proxy for analysts' stock return predictions. With this data, set up as a tournament, the analysts pick both a winner and a loser. With the tournament structure, I find that these analysts have no superior ability to pick the winning stock in terms of frequency. However I do find that taking a long/short portfolio of their picks yields an abnormal return. Showing that although they do not pick the winning stock more often, they do pick the stocks that have the best returns over our sample