Reuven Lehavy

TL;DR: In this paper, it was shown that purchasing short stocks with the most favorable consensus recommendations, in conjunction with daily portfolio rebalancing and a timely response to recommendation changes, yield annual abnormal gross returns greater than four percent.

TL;DR: In this paper, the authors examined the effect of the readability of firm written communication on the behavior of sell-side financial analysts and found that less readable 10-Ks are associated with greater dispersion, lower accuracy, and greater overall uncertainty in analyst earnings forecasts.

TL;DR: In this article, the authors examined the effect of the readability of firms' written communication on the behavior of sell-side financial analysts and found that less readable 10-Ks are associated with greater dispersion, lower accuracy, and greater overall uncertainty in analyst earnings forecasts.

TL;DR: In this paper, the authors show that an investment strategy based on the consensus (average) analyst recommendations of security analysts earns positive returns for the period 1986-1996, and that the strategy of purchasing stocks most highly recommended and selling short those least favorably recommended yielded a return of 75 basis points per month.

TL;DR: In this article, the authors demonstrate the role of three empirical properties of cross-sectional distributions of analysts' forecast errors in generating evidence pertinent to three important and heretofore separately analyzed phenomena studied in the analyst earnings forecast literature: purported bias (intentional or unintentional) in analysts' earnings forecasts, forecaster over/underreaction to information in prior realizations of economic variables, and positive serial correlation in analyst's forecast errors.