"News Dissemination and Investor Attention", with F. Degeorge and E. Ginglinger
We examine how investor attention changes when a firm adopts a modern news dissemination technology. We find that after continental European firms begin using an English-language electronic wire service to disseminate company news, they exhibit a stronger initial reaction to earnings surprises, a lower post earnings announcement stock price drift, and an increase in abnormal trading volume near earnings announcements, compared to when they disseminated their news in non-electronic format and in a continental European language. Our results hold for a sub-sample of firms for which the decision to use a wire service was likely exogenous. The effect of wire services on investor attention is due to the format of news (electronic and English-language), not to the increased speed of news transmission.
Review of Finance, Accepted.
"Speed and Expertise in Stock Picking: Older, Slower, and Wiser?", with C. Ornthanalai and K. Womack
We document significant differences among sell-side security analysts in how frequently they change their minds in making stock recommendations and find that this characteristic strongly predicts their recommendations’ value. Analysts who revise their decisions more slowly make more influential recommendations and generate better portfolio returns than those who do not.
We find that slower-revising analysts issue more timely recommendation changes and are less likely to herd on the consensus. Their decision speed-style is associated with positive career outcomes; they are more likely to attain the All-star status and have career longevity. Further, we find a strong tendency for analysts to change their recommendations more slowly throughout their career. While analysts’ decision-speed style and their career tenure correlate, the former is the only characteristic that robustly predicts their recommendations’ value. We link our findings to the role that reputation and experience play in individual decision making and support the notion that a deliberate, slower-decision style trumps a “beat the crowd” mentality.
R&R, Journal of Accounting and Economics
"Announcing the Announcement", with O. Dessaint
This paper studies how long in advance the date and time of earnings announcements are made public (the "Advance Notice Period"). We find that such Advance Notice Period varies within firm and that its variation affects how much investors pay attention to earnings news. This variation in investors' attention affects short-run and long-run stock prices, thereby creating incentives for firms to strategically reduce the Advance Notice Period when they plan to disclose bad news. Consistent with this idea, we find that within-firm variations in the Advance Notice Period predict the earnings surprise.
AFA 2015 (Boston), EFA 2014 (Lugano)
A nice presentation of this paper on CNBC.