Do super-analysts exist?

Analysts Are Victims of Behavioral Biases, Too

Investors dislike losses much more than they like gains; this is one of the core tenets of behavioral finance. According to BRC Investment Management LLC, it also applies to sell-side analysts working at Wall Street firms. Just like the rest of us, analysts behave in a way that’s inconsistent with the workings of a completely efficient market, says John Riddle, managing principal and chief investment officer at BRC. Their thinking and actions are influenced by the same complex set of factors and biases that influence investors in their financial decision-making process, he said, including overconfidence, information “anchoring,” groupthink or “herding,” and risk aversion. ….[READ]

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