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

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

Publikation: KonferencebidragPaperForskningpeer review

Abstrakt

Witnessing stock market history in the making leaves behind a vivid story, but does not provide valuable information. Nevertheless, well-versed finance professionals extrapolate from witnessed returns when forming beliefs about expected returns which we show by using a unique dataset regarding professionals’ career start in the finance industry. This result is robust to controlling for all publicly available information and interpersonal differences. Additionally, we find that returns witnessed early on in a career are more formative than those witnessed recently. Among the potential channels through which witnessed returns might affect professionals’ expectations, a judgmental bias appears the most plausible.
OriginalsprogEngelsk
Publikationsdato2017
Antal sider51
StatusUdgivet - 2017
Begivenhed2017 Financial Management Association Annual Meeting - Boston, USA
Varighed: 11 okt. 201714 okt. 2017
http://www.fma.org/boston

Konference

Konference2017 Financial Management Association Annual Meeting
LandUSA
ByBoston
Periode11/10/201714/10/2017
Internetadresse

Emneord

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

Citationsformater