Narrative Authority: Rethinking Speculation and the Construction of Economic Expertise

Leins, Stefan

doi:10.1080/00141844.2020.1765832

Cited by 18 publications

(12 citation statements)

References 61 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Instead, the analyst is prioritizing protecting their confidence levels, minimizing regret, and turning to other stocks where they have not had a recent failure. This is consistent with Leins' (2022, p. 359) conceptualization of the analyst role as one that entails developing narratives that gain traction as “expert knowledge” in the market. A recommendation failure suggests that such narratives have been weakened, so an analyst would want to act to protect other recommendations (and narratives) in the market that are performing, or have the potential to perform, by taking a low‐profile hold recommendation on the capitulated stock.…”

Section: Findings and Discussionsupporting

confidence: 84%

“…This research stream privileges the study of economic actors and their interactions and experiences to enrich our understanding of capital markets (Knorr‐Cetina & Preda, 2012). It repositions scholars away from viewing outputs, such as recommendations, as predominantly “calculative and rational,” to embrace experience, analyst individuality, and narration (Leins, 2022, p. 359). It is predicated on the view that to advance our understanding of analyst behavior we need to explore the “social arrangements that embed their work” (Fogarty & Rogers, 2005, p. 349).…”

Section: Related Literature On Stock Recommendationsmentioning

confidence: 99%

“…For instance, Spence et al (2019) identify the role of analyst recommendations and reports as “relational devices” to facilitate interaction with investors, rather than purely as investment advice. Relatedly, Leins (2022, p. 359) points out that “analysts' individuality and narration,” and not merely their models and calculations, are needed to understand sell‐side recommendations as a social practice. To provide empirical evidence about these social processes, we embrace the research approach espoused in, inter alia, Imam and Spence (2016), Graaf (2018), Lee and Manochin (2021), and Stolowy et al (2022) and engage with actors directly to explore how analysts act, and interact, in practice, drawing from their own words (Imam & Spence, 2016, p. 243).…”

Section: Introduction and Overviewmentioning

confidence: 99%

See 2 more Smart Citations

Throwing in the towel: What happens when analysts' recommendations go wrong?

Lee

Aleksanyan

Harris

et al. 2023

Contemporary Accting Res

View full text Add to dashboard Cite

Every analyst will experience stock recommendation failures during their career. Unlike many other professions, these pivotal moments occur in the full glare of clients, colleagues, equity‐sales teams, and the media. This research explores the practices of analysts up to and beyond the point where, faced with a failing recommendation, they contemplate “throwing in the towel” on their recommendation. Based on empirical evidence gathered from interviews with sell‐side analysts and their key interlocutors—equity‐sales specialists, investors, and investor relations officers—this paper uncovers several new empirical insights into the recommendation practices of analysts. The main argument made in the paper is that capitulation practices emerge from the specific contextual framework of individual recommendations and the analyst's conduct as a knowledgeable, emotional human agent. We identify several contextual contingencies of stock recommendations that underpin how a capitulation episode unfolds, including the temporal proximity of the capitulation to the original recommendation; the importance and profile of the stock to the analyst's reputation (“franchise intensity”); the level of interest/reaction from clients, equity‐sales teams and corporates; the nature/cause of recommendation failure; and recommendation boldness. Our study provides evidence that what an analyst does when faced with a failing recommendation cannot be reduced to a predictable, rational process and informs our understanding of observed practices such as the reluctance of analysts to capitulate and why “recommendation paralysis” often follows a recommendation capitulation.

show abstract

Section: Findings and Discussionsupporting

confidence: 84%

Section: Related Literature On Stock Recommendationsmentioning

confidence: 99%

Section: Introduction and Overviewmentioning

confidence: 99%

See 1 more Smart Citation

Throwing in the towel: What happens when analysts' recommendations go wrong?

Lee

Aleksanyan

Harris

et al. 2023

Contemporary Accting Res

View full text Add to dashboard Cite

show abstract

“…Tobin's Q represents how the market reacts to the performance of a firm. This reaction is based on the expert valuation of the firm, considering current price of capital assets, value of equity, bonds, speculations, and market hype (Leins, 2020). As a result, the market penalizes the value of assets especially those perceived as non‐performing, while placing premiums on organizations with large performing asset base.…”

Section: Methodsmentioning

confidence: 99%

Related diversification, firm level resources, and firm performance in the context of Australian extractive industry

Gyan

Jan‐Bezemer

2022

J Corp Accounting Finance

View full text Add to dashboard Cite

Related diversification literature highlights that the reason why corporations pursue this specific type of diversification is to achieve synergistic benefits through sharing common resources efficiently across related business units for higher financial performance. However, it is unclear whether this performance is influenced by the level of firm resources that a firm possesses. Using data from Australian extractive industry, this study assesses the heterogeneity of firm resource-possession in relation to firm performance and found that related diversified firms that possess higher resource levels extract larger proportion of synergistic advantage to enhance financial performance. The study has discussed key theoretical and practical implications.

show abstract

“…В основе этого процесса лежит работа экспертов, которые утверждают, что проводят «тщательный анализ» экономических тенденций и движений рынка. Появилось даже такое понятие, как нарративный (повествовательный) авторитет -narrative authority [Leins, 2022;Stolowy et al, 2022], в связи с необходимостью уточнения и расширения понимания построения нарративного авторитета на рынках капитала, поскольку влиятельные информационные посредники оказывают все большее влияние на рынки. Отсутствие собственного обоснованного представления о справедливой стоимости высокотехнологичных бизнесов ведет к преувеличению степени экспертности аналитиков.…”

Section: основные отличительные особенности модели «эффективного инте...unclassified

Heuristic Model of “Effective Interpreter” in Portfolio Investment in High-Tech Companies

Ilkevich

2022

SDRM

View full text Add to dashboard Cite

The last fifteen years are characterized by a sharp increase in the share of high-tech companies in terms of attracting investment resources in the world's leading stock markets. High-tech companies over this period significantly outpaced value stocks in terms of return on investment. On the one hand, what is happening is a natural process, since in the face of accelerating industry changes, both in traditional sectors and in sub-sectors of the new economy, there are more opportunities for the emergence of companies with disruptive innovations. High market capitalizations of such companies are a natural metric of fundamental shifts in the economy. On the other hand, the very nature of investment decision-making is changing, since an objective assessment of the intrinsic value of the business of high-tech companies is becoming vaguer, more controversial, dependent on future scenarios, and subject to interpretations. And these interpretations, according to the theory of reflexivity, are increasingly having a feedback effect on fundamentals, especially in high-tech companies.The purpose of this article is to conceptualize a new heuristic model of the “effective interpreter”, which, in the conditions of high reflexivity and narrative contexts of the stock market, has significantly diverged across a number of key attributes from the traditional model of the “rational investor”. The author compares the two models. The process of divergence of the two models occurs under the influence of a number of behavioral heuristics and cognitive biases. At the same time, the author emphasizes that a high narrative component in the value of companies does not always and necessarily mean the predominance of irrationality. Here it is more correct to assume some correlation between the rise of narrative decision contexts and the cognitive challenges of investment decision makers.As one of the possible directions for further research, the author notes the systematization of the main factors of cognitive biases, which seem to make switching to the “effective interpreter” model in portfolio investments in high-tech companies irreversible in the current conditions.

show abstract

Narrative Authority: Rethinking Speculation and the Construction of Economic Expertise

Cited by 18 publications

References 61 publications

Throwing in the towel: What happens when analysts' recommendations go wrong?

Throwing in the towel: What happens when analysts' recommendations go wrong?

Related diversification, firm level resources, and firm performance in the context of Australian extractive industry

Heuristic Model of “Effective Interpreter” in Portfolio Investment in High-Tech Companies

Contact Info

Product

Resources

About