Graduation Year
2021
Date of Submission
11-2020
Document Type
Open Access Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics
Reader 1
Benjamin Gillen
Terms of Use & License Information
Rights Information
© 2020 Maxwell O Dawson
OCLC Record Number
1242071033
Abstract
This paper lies at the convergence of the portfolio optimization literature and the equity research industry. I attempt to quantify the benefit provided to an investor by equity analysts from an asset allocation perspective, and hypothesize that no significant benefit exists because of the incentive misalignments facing analysts as well as the inherent difficulty of valuing stocks. Using a Bayesian regression framework with prior beliefs for alpha generated based on equity analysts’ recommendations, I find no significant difference in out-of-sample performance between portfolios which take analyst recommendations into account and portfolios which do not.
Recommended Citation
Dawson, Maxwell, "How Good are Equity Analysts? Investigating the Impact of Analyst Recommendations on Portfolio Performance" (2021). CMC Senior Theses. 2580.
https://scholarship.claremont.edu/cmc_theses/2580
