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How do financial analysts and equity salespeople perceive and cope with uncertainty?

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How do financial analysts and equity salespeople perceive and cope with uncertainty? / Tarim, Emre.
2017. Paper presented at 2017 Behavioural Finance Working Group Conference , London, United Kingdom.

Research output: Contribution to conference - Without ISBN/ISSN Conference paperpeer-review

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Tarim E. How do financial analysts and equity salespeople perceive and cope with uncertainty?. 2017. Paper presented at 2017 Behavioural Finance Working Group Conference , London, United Kingdom.

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Tarim, Emre. / How do financial analysts and equity salespeople perceive and cope with uncertainty?. Paper presented at 2017 Behavioural Finance Working Group Conference , London, United Kingdom.51 p.

Bibtex

@conference{47c35e82917e4c868ff9b61c0feec679,
title = "How do financial analysts and equity salespeople perceive and cope with uncertainty?",
abstract = "Financial analysts have received considerable scholarly attention regarding their forecasting process and accuracy in the company valuations for fund manager clients, which has unearthed biases and errors. The identification of these biases and errors does not explain how analysts make sense of and cope with the uncertainty that surround their long-term company value and share price forecasts. Moreover, hardly anything has been said in this line of research about the role of equity salespeople in the analysts{\textquoteright} long-term company valuations and investment advice for fund managers. This paper demonstrates that for analysts, uncertainty happens in relation to the information and knowledge that are not directly associated with the intrinsic and comparative company valuation techniques for the long-term. This implies that there are actors in the market who do not solely base their judgements and decisions on the information related to the intrinsic and comparative valuation of companies for the long-term. Analysts are dismissive of such short-term uncertainty because of the fund manager client demand for the analyst output that is based on the intrinsic and comparative valuation of companies for the long-term. For the same reason, salespeople, whose main task is marketing the analyst output to fund managers and generating brokerage fees, do not meaningfully question the analysts{\textquoteright} knowledge and practice in the face of short-term uncertainty surrounding the analysts{\textquoteright} forecasts. ",
keywords = "Financial analysts, equity salespeople, Financial markets, Uncertainty, Sensemaking, Performativity",
author = "Emre Tarim",
year = "2017",
month = jun,
day = "10",
language = "English",
note = "2017 Behavioural Finance Working Group Conference ; Conference date: 12-06-2017 Through 13-06-2017",
url = "http://www.busman.qmul.ac.uk/research/research-centres/behavioural-finance-working-group/",

}

RIS

TY - CONF

T1 - How do financial analysts and equity salespeople perceive and cope with uncertainty?

AU - Tarim, Emre

PY - 2017/6/10

Y1 - 2017/6/10

N2 - Financial analysts have received considerable scholarly attention regarding their forecasting process and accuracy in the company valuations for fund manager clients, which has unearthed biases and errors. The identification of these biases and errors does not explain how analysts make sense of and cope with the uncertainty that surround their long-term company value and share price forecasts. Moreover, hardly anything has been said in this line of research about the role of equity salespeople in the analysts’ long-term company valuations and investment advice for fund managers. This paper demonstrates that for analysts, uncertainty happens in relation to the information and knowledge that are not directly associated with the intrinsic and comparative company valuation techniques for the long-term. This implies that there are actors in the market who do not solely base their judgements and decisions on the information related to the intrinsic and comparative valuation of companies for the long-term. Analysts are dismissive of such short-term uncertainty because of the fund manager client demand for the analyst output that is based on the intrinsic and comparative valuation of companies for the long-term. For the same reason, salespeople, whose main task is marketing the analyst output to fund managers and generating brokerage fees, do not meaningfully question the analysts’ knowledge and practice in the face of short-term uncertainty surrounding the analysts’ forecasts.

AB - Financial analysts have received considerable scholarly attention regarding their forecasting process and accuracy in the company valuations for fund manager clients, which has unearthed biases and errors. The identification of these biases and errors does not explain how analysts make sense of and cope with the uncertainty that surround their long-term company value and share price forecasts. Moreover, hardly anything has been said in this line of research about the role of equity salespeople in the analysts’ long-term company valuations and investment advice for fund managers. This paper demonstrates that for analysts, uncertainty happens in relation to the information and knowledge that are not directly associated with the intrinsic and comparative company valuation techniques for the long-term. This implies that there are actors in the market who do not solely base their judgements and decisions on the information related to the intrinsic and comparative valuation of companies for the long-term. Analysts are dismissive of such short-term uncertainty because of the fund manager client demand for the analyst output that is based on the intrinsic and comparative valuation of companies for the long-term. For the same reason, salespeople, whose main task is marketing the analyst output to fund managers and generating brokerage fees, do not meaningfully question the analysts’ knowledge and practice in the face of short-term uncertainty surrounding the analysts’ forecasts.

KW - Financial analysts

KW - equity salespeople

KW - Financial markets

KW - Uncertainty

KW - Sensemaking

KW - Performativity

M3 - Conference paper

T2 - 2017 Behavioural Finance Working Group Conference

Y2 - 12 June 2017 through 13 June 2017

ER -