Does the Market Listen to Whispers

In this study, we investigate the characteristics and information content of whisper forecasts of earnings. Based on data on earnings whispers obtained from public sources and from one private website (‘getwhispers.com’), we examine whether whisper forecasts are more optimistic, on average, than con...

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Main Authors: BHATTACHARYA, Nilabhra, Sheikh, Aamer, Thiagarajan, Ramu
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Language:English
Published: Institutional Knowledge at Singapore Management University 2006
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Online Access:https://ink.library.smu.edu.sg/soa_research/965
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spelling sg-smu-ink.soa_research-19642013-05-14T05:30:08Z Does the Market Listen to Whispers BHATTACHARYA, Nilabhra Sheikh, Aamer Thiagarajan, Ramu In this study, we investigate the characteristics and information content of whisper forecasts of earnings. Based on data on earnings whispers obtained from public sources and from one private website (‘getwhispers.com’), we examine whether whisper forecasts are more optimistic, on average, than consensus analyst forecasts, and how the market perceives whisper forecasts as compared to consensus analyst forecasts. Our results indicate that whisper forecasts are more optimistic, on average, than consensus analyst forecasts. Further, we find that consensus forecasts are as accurate as whisper forecasts. Our market perception tests reveal that in both the short-run and the long-run, whispers are not incrementally informative to consensus analyst forecasts. Further, we find no evidence that analysts use the information contained in whispers to revise their forecasts. On the contrary, we find that analysts' consensus forecasts often have incremental information content over whisper numbers. However, our inferences are not applicable to recent whisper data since our sample period ends in March 2001. Proprietary ways of analyzing market and street expectations have the potential to add value in picking stocks and assessing market direction. Our findings do not apply to data disseminated via existing, commercial whisper websites that are not part of the sample which may have the potential to add value through proprietary data or analyses using proprietary algorithms. 2006-01-01T08:00:00Z text https://ink.library.smu.edu.sg/soa_research/965 info:doi/10.3905/joi.2006.616840 Research Collection School Of Accountancy eng Institutional Knowledge at Singapore Management University Accounting Portfolio and Security Analysis
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Accounting
Portfolio and Security Analysis
spellingShingle Accounting
Portfolio and Security Analysis
BHATTACHARYA, Nilabhra
Sheikh, Aamer
Thiagarajan, Ramu
Does the Market Listen to Whispers
description In this study, we investigate the characteristics and information content of whisper forecasts of earnings. Based on data on earnings whispers obtained from public sources and from one private website (‘getwhispers.com’), we examine whether whisper forecasts are more optimistic, on average, than consensus analyst forecasts, and how the market perceives whisper forecasts as compared to consensus analyst forecasts. Our results indicate that whisper forecasts are more optimistic, on average, than consensus analyst forecasts. Further, we find that consensus forecasts are as accurate as whisper forecasts. Our market perception tests reveal that in both the short-run and the long-run, whispers are not incrementally informative to consensus analyst forecasts. Further, we find no evidence that analysts use the information contained in whispers to revise their forecasts. On the contrary, we find that analysts' consensus forecasts often have incremental information content over whisper numbers. However, our inferences are not applicable to recent whisper data since our sample period ends in March 2001. Proprietary ways of analyzing market and street expectations have the potential to add value in picking stocks and assessing market direction. Our findings do not apply to data disseminated via existing, commercial whisper websites that are not part of the sample which may have the potential to add value through proprietary data or analyses using proprietary algorithms.
format text
author BHATTACHARYA, Nilabhra
Sheikh, Aamer
Thiagarajan, Ramu
author_facet BHATTACHARYA, Nilabhra
Sheikh, Aamer
Thiagarajan, Ramu
author_sort BHATTACHARYA, Nilabhra
title Does the Market Listen to Whispers
title_short Does the Market Listen to Whispers
title_full Does the Market Listen to Whispers
title_fullStr Does the Market Listen to Whispers
title_full_unstemmed Does the Market Listen to Whispers
title_sort does the market listen to whispers
publisher Institutional Knowledge at Singapore Management University
publishDate 2006
url https://ink.library.smu.edu.sg/soa_research/965
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