Abstract: This paper aims to assess the performance of trading strategies based on the investment recommendations (Trading ideas) made by security analyst, who regularly publishes stock recommendation and earnings forecasts. This paper seeks to describe the investment recommendations, earning forecast error and the source of the error. Our results suggest that these trading ideas have not been useful for stock selection. A decomposition of the errors suggests that the errors are largely random and based on an inability of security analysts to predict at firm, rather than industry and economy level.

Keyword: Behavioral finance；Security analysts；Forecast error