Do Investors Experience Heuristics in Earnings Forecasting?

Praditha, Riza; Haliah, Haliah; Habbe, Abdul Hamid; Rura, Yohanis

doi:10.3846/btp.2020.12018

Cited by 5 publications

(5 citation statements)

References 31 publications

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“…Dengan kata lain, investor lebih memilih untuk berinvestasi pada perusahaan yang diperkirakan dapat menghasilkan capital gain dibandingkan dengan capital loss. Meski demikian, seluruh tipe informasi yang tersedia di pasar modal memiliki peran penting dalam mempengaruhi transaksi investor dalam menentukan keputusan investasinya (Praditha et. al, 2020).…”

Section: Pendahuluanunclassified

Efek Perubahan Laba Akuntansi Dan Arus Kas Operasi Terhadap Return Saham

Praditha¹,

Sari²,

Gustiningsih³

et al. 2023

Aksioma

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This study aims to analyze the effect of accounting earnings and operating cash flow on stock returns. The population in this study are companies listed on the Indonesia Stock Exchange. The sample used the purposive sampling method with the observation year 2017-2020. The results showed that accounting profit proved to have a positive and significant effect on stock returns. This means that the greater the accounting profit earned by the company, the greater the stock return generated. Different results are shown in the results of the operating cash flow test where the results show a positive but not significant effect on stock returns. These results have implications for the accounting profit presentation policy, in which the company is expected to be able to maximize the acquisition of accounting profit in order to increase the acquisition of stock returns.

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Section: Pendahuluanunclassified

Efek Perubahan Laba Akuntansi Dan Arus Kas Operasi Terhadap Return Saham

Praditha¹,

Sari²,

Gustiningsih³

et al. 2023

Aksioma

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“…Demonstrating the effect of historical data, Kaustia et al (2008) showed that the prediction of future stock returns is influenced by anchors in the form of historic stock returns in students and, to a lesser degree, in financial market professionals. Praditha, Haliah, Habbe, and Rura (2020) also showed that investors' future earnings forecasts can be affected by various reference values such as past and current earnings, internal company information, and external economic factors. From historic data, Ansar et al, (2014) showed that in large dams building projects, cost plannings are heavily anchored on the similar projects, ignoring the unique environmental and economic situation of each construction site.…”

Section: Predictionmentioning

confidence: 99%

Anchoring effect in business

Bahník,

Yoon

2023

Preprint

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In many business and managerial decisions, accurate estimation of numeric attributes is crucial, but such estimates are often biased by a previously considered value—a cognitive bias known as the anchoring effect. This paper provides an overview of the current state of the literature on the anchoring effect, with a particular focus on its applications in business settings. First, we summarize different processes that may underlie the anchoring effect, which include conversational inferences, insufficient adjustment from the anchor value, selective accessibility of information compatible with an anchor, and distortion of a response scale. Second, we review the applications of anchoring across various business practices, such as predictions, valuations, negotiations, auctions, promotions, and job performance evaluations. We provide examples of potential sources of anchors in these domains and discuss limitations of the existing studies. Next, we describe the challenge of debiasing anchoring and introduce potential strategies for reducing the influence of the anchoring effect. Finally, we discuss topics that have been underexplored and suggest avenues for future research on the anchoring effect.

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“…A considerable amount of literature has been published on financial behavior (Njegovanović, 2018(Njegovanović, , 2020Gavurova et al, 2019;Hadbaa, 2019;Dewi et al, 2020;Hartanto et al, 2020;Bukalska, 2020). A number of cross-sectional studies suggest that various cognitive limitations and psychological bias change household decision-making in general (Bacik et al, 2020;Jordão et al, 2020;Minasyan et al, 2020), and particularly on consumption/savings (Mody et al, 2012;Ceritoğlu, 2013;Mastrogiacomo & Alessie, 2014;Nguyen et al, 2019;Praditha et al, 2020) and debt/savings (Nofsinger, 2012;Kośny & Piotrowska, 2013;Kłopocka, 2017) ratios in boom-busts periods. However, the study by Zwerenz (2018) also finds that the behavior of real estate prices also significantly influences the cost of capital.…”

Section: Literature Reviewmentioning

confidence: 99%

Does the real estate market behavior predict the trust crisis in the financial sector? The case of the ECB and the Euro

Brychko

Vasilyeva

Rowland

et al. 2021

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Research background: Based on the history of financial crises, real estate market behavior could be thought of as a key benchmark of trust shifts in the financial sector of the economy. Plunging real estate asset prices accompanied by the financial "bubbles" explosion could be viewed as the harbinger ? even the cause ? of the public trust crash in the financial sector. Purpose of the article: This study intends to assess the extent to which the real estate market behavior determinants, along with financial sector consumers' feelings, are able to predict trust crises in the financial sector, namely to its primary institutions ? European Central Bank and the Euro. Methods: In order to estimate the probability of a trust crisis in the financial sector, two logistic regression logit models were developed based on two types of dependent variables as they reflect trust violations in the financial system primary institutions ? net trust in European Central Bank (Model I) and net support for the Euro (Model II). The research was conducted on quarterly panel data of the EU countries from the euro area covering the period from 2000 to 2019. Logit regressions employed for data processing and analysis were performed in the computational system STATISTICA. Findings & value added: The logit-modeling results show that determinants of irrational real estate buyers' behavior are powerless in predicting the escalation of the trust crisis in the Euro. However, binary models of real estate market behavior could be successfully used to predict the probability of the trust crisis in the European Central Bank. The results show that real house price indices, price to income ratio, price to rent ratio, and rent prices accompanied by the financial sector consumers' feelings are statistically significant, providing the best distribution between the normal times and periods of trust crisis in the European Central Bank. Irrational real estate market behavior may indicate serious problems in the trust violations in the European Central Bank, and it should be a signal for policymakers to take actions towards more efficient financial and real estate market regulation following the behavioral approach.

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Do Investors Experience Heuristics in Earnings Forecasting?

Cited by 5 publications

References 31 publications

Efek Perubahan Laba Akuntansi Dan Arus Kas Operasi Terhadap Return Saham

Efek Perubahan Laba Akuntansi Dan Arus Kas Operasi Terhadap Return Saham

Anchoring effect in business

Does the real estate market behavior predict the trust crisis in the financial sector? The case of the ECB and the Euro

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