when noise can help | Outlook Business
Home  /  Strategy  /  Insight  / When noise can help | APR 26 , 2014


When noise can help
Do the divergent views given by analysts have an influential effect on stock prices? Researchers find out

Team Outlook Business

When the going gets tough, it is not just investors who are confused about which firm to back — uncertainty affects analysts, who investors depend on more during downturns, as well. This ends up making analyst output jagged and screechy. Roger K Loh and René M Stulz studied analyst reports between 1983 and 2011 and found that analysts tend to churn out divergent views during a crisis. However, despite the divergence, these views tend to have a much more influential effect on stock prices.  

Title: Is Sell-Side Research More Valuable in Bad Times?

Source: The National Bureau of Economic Research

Here's your chance to read the latest issue of Outlook Business for free! Download the Outlook ​Magazines app now. Available on Play Store and App Store
On Stands Now