Final working paper version. "" Published version: The Review of Financial Studies, Volume 31, Issue 7, July 2018, pp. 2499–2552. Past fund performance does a poor job of predicting future outcomes. The reason is noise. Using a random effects framework, we reduce the noise by pooling...

Using detailed information on establishments owned by U.S. public firms, we construct a novel measure of geographic linkage between firms. We show that the returns of geography-linked firms have strong predictive power for focal firm returns and fundamentals. A long-short strategy based on this...

We provide a psychological explanation for the delayed price response to news about economically linked firms. We show that the return predictability of economically linked firms depends on the nearness to the 52-week high stock price. The interaction between news about economically linked firms...

Sell-side fundamental analyst reports are highly valued in the financial industry and include three main quantitative components: earnings forecasts, target prices, and buy/sell recommendations. An important question for investment managers is then, how accurate are the forecasts of fundamental...

We challenge the view that persistent differences in accuracy across analysts are proof that analysts differ in their ability to forecast stock prices. We show that these persistent differences in accuracy are driven instead by stock return volatility. Building upon option pricing theory, we...

Over the past 12 years, financial analysts across the world have been optimistically wrong with their 12-month earnings forecasts by 25.3%. This study may be the first of its kind to assess analyst earnings forecast accuracy at all listed companies across the globe, covering 70 countries. A...

We examine the overall and individual analyst performance of 12-month-ahead target price forecasts over the 10-years, 2000-2009. Implied target price-based returns exceed actual returns by an average of 15%, and absolute target price forecast errors average 45%. At the end of the 12-month...

Regulators are not always able to anticipate how mandates will translate to financial reporting practice, particularly when managers are able to exercise reporting discretion. When XBRL, the eXtensible Business Reporting Language, was mandated by the SEC, financial analysts were among the...

We investigate whether the widespread adoption of online visits after the COVID-19 shock has been associated with higher analysts' forecast errors. Using a difference-in-differences methodology, we find a positive association between online mode and analysts' forecast errors. We further discuss...

Prior research finds that sell-side analysts are generally willing partners with company management in facilitating the consistent meeting or beating of earnings expectations. We examine analysts who demonstrate the opposite behavior: issuing an unusually optimistic earnings forecast at the end...