Betting on trends: Intuitive forecasts of financial risk and return

doi:10.1016/0169-2070(93)90030-Q

International Journal of Forecasting

Volume 9, Issue 3, November 1993, Pages 355-371

https://doi.org/10.1016/0169-2070(93)90030-Q Get rights and content

Abstract

Based on nearly 38 000 forecasts of stock prices and exchange rates, it appears that non-experts expect the continuation of apparent past ‘trends’ in prices. Thus, they are optimistic in bull markets and pessimistic in bear markets. Interestingly, the subjects hedge their forecasts, i.e. their subjective probability distributions are skewed in the opposite direction. As a result, perceived risk also depends on prior performance.

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Betting on trends: Intuitive forecasts of financial risk and return

Abstract

Organizational Behavior and Human Decision Processes

Organizational Behavior ana Human Decision Processes

Cognitive Psychology

Organizational Behavior and Human Decision Processes

Journal of Accounting and Economics

Organizational Behavior and Human Decison Processes

Organizational Behavior and Human Decision Processes

International Journal of Forecasting

Organizational Behavior and Human Decision Processes

Organizational Behavior and Human Performance

Tests of analysts' overreaction / underreaction to earnings information as an explanation for anomalous stock price behavior

Journal of Finance

On the social psychology of the stock market: Aggregate attributional effects and the regressiveness of prediction

Journal of Personality and Social Psychology

Judgmental extrapolation and market overreaction: On the use and disuse of news

Journal of Behavioral Decision Making

Judgmental extrapoliton and the salience of change

Journal of Forecasting

Principles of Corporate Finance

Do biases in probability judgment matter in markets? Experimental evidence

American Economic Review

Measuring abnormal performance: Do stocks overreact?

Journal of Financial Economics

What moves stock prices?

Journal of Portfolio Management

What do economists know about the stock market?

Journal of Portfolio Management

Earnings Forecasts and Share Price Reversals

Does the Stock market overreact?

Journal of Finance

A mean-reverting walk down Wall Street

Journal of Economic Perspectives

Do security analysts overreact?

American Economic Review

Positive feedback investment strategies and destabilizing rational speculation

Journal of Finance

Noise trader risk in financial markets

Journal of Political Economy

Technical Analysis of Stock Trends

Patterns, prototypes and predictions: An exploratory study

Journal ofAccounting Research

Intuitive time-series extrapolation

Journal of Accounting Research