@article {10.3844/ajassp.2005.383.386,
article_type = {journal},
title = {Will Financial Analysts Mistake Stocks of Good Companies for Good Stocks? Evidence from Taiwan Stock Market},
author = {Chen, I-Ju},
volume = {2},
year = {2005},
month = {Jan},
pages = {383-386},
doi = {10.3844/ajassp.2005.383.386},
url = {https://thescipub.com/abstract/ajassp.2005.383.386},
abstract = {It has been shown that the individual or institutional investors rely on the information
provided by the financial analysts. A good stock recommended by financial experts is expected to make
profit to the investors. However, due to the cognitive biases, the financial analysts or investors are
probably confused in the firm characteristics between the good stocks and the stocks of good companies.
Good companies are normally inferred to the company that have good managing and operating systems,
however, it is usually though to have good returns as good stocks. The future earning forecasts of these
good companies may be thus overestimated as compared with the others. Such cognitive biases
probably results in improper investment and investment loss. In this study, the reputation survey results
for the companies in Taiwan and the corresponding financial data are used to verify the proposed
cognitive biases hypothesis. The empirical evidence in this study shows that financial analysts mistake
stocks of good companies for good stocks. However, it is also shown that the average one-year
buy-and-hold return of these sample firms (including good companies and good stocks) is still higher
than that of the chosen matching firms.},
journal = {American Journal of Applied Sciences},
publisher = {Science Publications}
}