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Thoughts Online Magazine
Collected Articles on Culture & Politics
Believing in Track Records 
12th-Mar-2007 12:15 pm
Turns out to be harder for the stock & bond companies: they lie about them.

Comparing two snapshots of the historical I/B/E/S database of research analyst stock recommendations, taken in 2002 and 2004 but each covering the same time period 1993-2002, we identify 54,729 ex post changes (out of 280,463 observations), including alterations of recommendation levels, additions and deletions of records, and removal of analyst names. The changes appear non-random across brokerage firms, analysts, and tickers, and have a significant impact on the overall distribution of recommendations across stocks and within individual stocks and brokerage firms. They also affect trading signal classifications, back-testing inferences, track records of individual analysts, and models of analysts' career outcomes in the three years following the changes.

Hat tip to Instapundit.
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