We test whether the US stock market is myopic in the sense of overvaluing short term earnings and undervaluing long term earnings (see, e.g., Porter [1992;1993]. Our tests rely on an accounting-based valuation model that generates predictions about how prices should relate to expected future...

This paper tests whether the US stock market is myopic, in the sense that it places less than the appropriate weight on expected long-run earnings. The tests are made possible through reliance on a valuation model used by Ohlson [1995] that permits us, using only minimal assumptions, to make...