Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5090880 | Journal of Banking & Finance | 2008 | 14 Pages |
Abstract
Unlike previous papers, which have focused on the timeliness ranks, we examine Value Line's 3-5 year projections for stock returns, earnings, sales and related measures. We find that Value Line's stock return and earnings forecasts exhibit large positive bias, although their sales predictions do not. For stock returns, Value Line's projections lack predictive power; for other variables predictive power may exist to some degree. Our findings suggest the spectacular past performance of the timeliness indicator reflects either close alignment with other known anomalies or data mining, and that investors and researchers should use Value Line's long-term projections with caution.
Keywords
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Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Andrew C. Szakmary, C. Mitchell Conover, Carol Lancaster,