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Can analyst predict stock market crashes?

Author

Listed:
  • Terence t. l. Chong

    (Department of Economics and HK Institute of Asia-Pacific Studies, The Chinese Univ. of Hong Kong)

  • Xiaolei Wang

    (Department of Economics, The Chinese University of Hong Kong)

Abstract

The frequency of financial market turmoil has been rising over the past two decades. While the incidence of market turmoil has increased, the performance of analysts during tumultuous times has not received much attention in the literature. This paper examines whether the accuracy of analyst forecasts on stock returns varies during tumultuous times. Our results indicate that analysts' forecast performance during stock market crashes drops significantly.

Suggested Citation

  • Terence t. l. Chong & Xiaolei Wang, 2013. "Can analyst predict stock market crashes?," Economics Bulletin, AccessEcon, vol. 33(1), pages 158-166.
    • Handle: RePEc:ebl:ecbull:eb-12-00924
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Analyst forecast dispersion; Stock market crash; Excess returns.;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets

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