English (United Kingdom)

https://curated-unify.zendy.io/wp-json/zendy-region/v1/featured_content/oa?rat=en

https://curated-unify.zendy.io/wp-json/zendy-region/v1/highlighted_journal/

Global: Zendy Tools annual

Presents the keyphrase highlighting as premium feature

Keyphrase Highlighting

Presents the summarisation as premium feature

Summarisation

Insights

Presents the pdf analysis as premium feature

PDF Analysis

Presents the zaia usage as premium feature

ZAIA

Global: Zendy Tools monthly

Global: Zendy Plus monthly

Presents the access of premium content as premium feature

Premium Content

Global: Zendy Plus annual

Global: Zendy Free Plan

I study the behavior and the performance of the long-term forecasts issued byfinancial analysts with respect to the Extrapolation Hypothesis. Thathypothesis states that investors, extrapolating from the firms' recentperformances, are too optimistic about growth and large firms and toopessimistic about value and small firms. I find that the forecasting errors arehigher for the growth firms and large firms, thus providing support for theExtrapolation Hypothesis. However, in addition to the rosy picture of thegrowth and large firms, the forecasts of the value and small firms are not sogloomy in many cases. My analysis also reveals that expectations move togetherfor all categories of book-to-market and all sizes of firms. I proceed byinvestigating some common factors that may influence analysts' long-termforecasts, including co-movement and excessive optimism. I find that macrofactors beyond a firm's recent performance may influence the formation ofexpectations.

The Naive Extrapolation Hypothesis and the Rosy-Gloomy Forecasts