What is the Analyst Anomaly ?

There are three separate effects that we have included under the term analyst anomaly. The first, which is technically not an anomaly, is the fact that in general over long periods stocks that analysts recommend as buys do seem to outperform the mar

ket averages. The second and third , which are anomalies since they violate the concept of an efficient market , are that long short portfolios based on changes and analyst recommendations and long short portfolios based on analyst estimate revisions generate positive risk adjusted returns for many months after the portfolios are formed.


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