Wall Street Crosses Memory Lane: How Witnessed Returns Affect Professionals' Expected Returns

Arvid O. I. Hoffmann, Zwetelina Iliewa, Lena Jaroszek

Publikation: Working paperForskning

Resumé

Witnessing stock-market history in the making creates a vivid story, but does not provide valuable information. However, finance professionals extrapolate from personally witnessed returns, which we show by using a unique dataset about the timing of their career start in the finance industry. This result is robust when controlling for all publicly available information and other time-fixed effects as well as interpersonal differences. Additionally, we find that returns witnessed early in the career are more formative than those witnessed recently. Finally, among the potential channels through which witnessed returns might affect expected returns, a judgmental bias appears most plausible.
OriginalsprogEngelsk
Udgivelses stedwww
UdgiverSSRN: Social Science Research Network
Antal sider51
StatusUdgivet - 2016

Emneord

  • Finance professionals
  • Expected returns
  • Non-informative observations
  • Early career experiences

Citer dette

Hoffmann, A. O. I., Iliewa, Z., & Jaroszek, L. (2016). Wall Street Crosses Memory Lane: How Witnessed Returns Affect Professionals' Expected Returns. www: SSRN: Social Science Research Network.
Hoffmann, Arvid O. I. ; Iliewa, Zwetelina ; Jaroszek, Lena. / Wall Street Crosses Memory Lane : How Witnessed Returns Affect Professionals' Expected Returns. www : SSRN: Social Science Research Network, 2016.
@techreport{39b2cf3011e04a45ac1aecb9a59c3cc7,
title = "Wall Street Crosses Memory Lane: How Witnessed Returns Affect Professionals' Expected Returns",
abstract = "Witnessing stock-market history in the making creates a vivid story, but does not provide valuable information. However, finance professionals extrapolate from personally witnessed returns, which we show by using a unique dataset about the timing of their career start in the finance industry. This result is robust when controlling for all publicly available information and other time-fixed effects as well as interpersonal differences. Additionally, we find that returns witnessed early in the career are more formative than those witnessed recently. Finally, among the potential channels through which witnessed returns might affect expected returns, a judgmental bias appears most plausible.",
keywords = "Finance professionals, Expected returns, Non-informative observations, Early career experiences, Finance professionals, Expected returns, Non-informative observations, Early career experiences",
author = "Hoffmann, {Arvid O. I.} and Zwetelina Iliewa and Lena Jaroszek",
year = "2016",
language = "English",
publisher = "SSRN: Social Science Research Network",
type = "WorkingPaper",
institution = "SSRN: Social Science Research Network",

}

Hoffmann, AOI, Iliewa, Z & Jaroszek, L 2016 'Wall Street Crosses Memory Lane: How Witnessed Returns Affect Professionals' Expected Returns' SSRN: Social Science Research Network, www.

Wall Street Crosses Memory Lane : How Witnessed Returns Affect Professionals' Expected Returns. / Hoffmann, Arvid O. I.; Iliewa, Zwetelina; Jaroszek, Lena.

www : SSRN: Social Science Research Network, 2016.

Publikation: Working paperForskning

TY - UNPB

T1 - Wall Street Crosses Memory Lane

T2 - How Witnessed Returns Affect Professionals' Expected Returns

AU - Hoffmann, Arvid O. I.

AU - Iliewa, Zwetelina

AU - Jaroszek, Lena

PY - 2016

Y1 - 2016

N2 - Witnessing stock-market history in the making creates a vivid story, but does not provide valuable information. However, finance professionals extrapolate from personally witnessed returns, which we show by using a unique dataset about the timing of their career start in the finance industry. This result is robust when controlling for all publicly available information and other time-fixed effects as well as interpersonal differences. Additionally, we find that returns witnessed early in the career are more formative than those witnessed recently. Finally, among the potential channels through which witnessed returns might affect expected returns, a judgmental bias appears most plausible.

AB - Witnessing stock-market history in the making creates a vivid story, but does not provide valuable information. However, finance professionals extrapolate from personally witnessed returns, which we show by using a unique dataset about the timing of their career start in the finance industry. This result is robust when controlling for all publicly available information and other time-fixed effects as well as interpersonal differences. Additionally, we find that returns witnessed early in the career are more formative than those witnessed recently. Finally, among the potential channels through which witnessed returns might affect expected returns, a judgmental bias appears most plausible.

KW - Finance professionals

KW - Expected returns

KW - Non-informative observations

KW - Early career experiences

KW - Finance professionals

KW - Expected returns

KW - Non-informative observations

KW - Early career experiences

M3 - Working paper

BT - Wall Street Crosses Memory Lane

PB - SSRN: Social Science Research Network

CY - www

ER -

Hoffmann AOI, Iliewa Z, Jaroszek L. Wall Street Crosses Memory Lane: How Witnessed Returns Affect Professionals' Expected Returns. www: SSRN: Social Science Research Network. 2016.