TY - JOUR
T1 - Financial analysts' forecasts of earnings
T2 - Their value to investors
AU - Givoly, Dan
AU - Lakonishok, Josef
PY - 1980
Y1 - 1980
N2 - This paper attempts to determine whether financial analysts' forecasts of earnings are useful to investors. This is accomplished by devising and evaluating the performance of trading rules under which transactions are triggered by revisions in earnings forecasts. The main finding is that an investor who acts upon the publicly available revisions of earnings forecasts can consistently outperform a buy-and-hold policy; in fact, such an investor could more than double his return. The results are inconsistent with the efficient market-hypothesis and indicate that the market reacts gradually rather than instantaneously to new information.
AB - This paper attempts to determine whether financial analysts' forecasts of earnings are useful to investors. This is accomplished by devising and evaluating the performance of trading rules under which transactions are triggered by revisions in earnings forecasts. The main finding is that an investor who acts upon the publicly available revisions of earnings forecasts can consistently outperform a buy-and-hold policy; in fact, such an investor could more than double his return. The results are inconsistent with the efficient market-hypothesis and indicate that the market reacts gradually rather than instantaneously to new information.
UR - http://www.scopus.com/inward/record.url?scp=85017296654&partnerID=8YFLogxK
U2 - 10.1016/0378-4266(80)90020-5
DO - 10.1016/0378-4266(80)90020-5
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AN - SCOPUS:85017296654
SN - 0378-4266
VL - 4
SP - 221
EP - 233
JO - Journal of Banking and Finance
JF - Journal of Banking and Finance
IS - 3
ER -