Information Misweighting and Stock Recommendations

I provide evidence that analysts whose earnings forecast revisions showed signs of greater exaggeration in the past make recommendation changes that lead to lower abnormal returns than their peers. Interpreting stock recommendations as a forecast of future abnormal returns, I show that this evidence is consistent with the hypothesis that analysts who typically exaggerate or overstate the weight of their private information when issuing forecasts also do so when making recommendations. I also show that past earnings forecast provide incremental information about analysts' recommending behavior beyond that contained in past recommendations.Information misweighting; stock recommendations; earnings forecasts; financial analysts

Phase behavior of parallel hard cylinders

We test the performance of a recently proposed fundamental measure density functional of aligned hard cylinders by calculating the phase diagram of a monodisperse fluid of these particles. We consider all possible liquid crystalline symmetries, namely nematic, smectic and columnar, as well as the crystalline phase. For this purpose we introduce a Gaussian parameterization of the density profile and use it to minimize numerically the functional. We also determine, from the analytic expression for the structure factor of the uniform fluid, the bifurcation points from the nematic to the smectic and columnar phases. The equation of state, as obtained from functional minimization, is compared to the available Monte Carlo simulation. The agreement is is very good, nearly perfect in the description of the inhomogeneous phases. The columnar phase is found to be metastable with respect to the smectic or crystal phases, its free energy though being very close to that of the stable phases. This result justifies the observation of a window of stability of the columnar phase in some simulations, which disappears as the size of the system increases. The only important deviation between theory and simulations shows up in the location of the nematic-smectic transition. This is the common drawback of any fundamental measure functional of describing the uniform phase just with the accuracy of scaled particle theory.Comment: 17 pages, 5 figure