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Talking Numbers: Technical versus fundamental investment recommendations

Author

Listed:
  • Avramov, Doron
  • Kaplanski, Guy
  • Levy, Haim

Abstract

Market efficiency is often evaluated through the ability of fundamental analysis or technical trading rules to exploit predictable patterns in asset prices. The evidence following decades of empirical research is mixed. This paper reexamines the evidence using a novel database from the TV show “Talking Numbers.” We assess the performance of 1,599 investment recommendations, where each recommendation features a fundamental and a technical forecast. We show that technicians are able to predict individual stock returns to economically significant degrees up to a one-year horizon. Beyond that, the null hypothesis of market efficiency is not rejected for market-wide indices, equity sectors, bonds, or commodities.

Suggested Citation

  • Avramov, Doron & Kaplanski, Guy & Levy, Haim, 2018. "Talking Numbers: Technical versus fundamental investment recommendations," Journal of Banking & Finance, Elsevier, vol. 92(C), pages 100-114.
    • Handle: RePEc:eee:jbfina:v:92:y:2018:i:c:p:100-114
    DOI: 10.1016/j.jbankfin.2018.05.005
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    Citations

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    Cited by:

    1. Michael Heinrich Baumann, 2022. "Beating the market? A mathematical puzzle for market efficiency," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 45(1), pages 279-325, June.
    2. Samuel YM Ze‐To, 2022. "Fundamental index aligned and excess market return predictability," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 41(3), pages 592-614, April.
    3. Zhaobo Zhu & Licheng Sun, 2024. "When Buffett Meets Bollinger: An Integrated Approach to Fundamental and Technical Analysis," Post-Print hal-04703041, HAL.

    More about this item

    Keywords

    Fundamental analysis; Technical rules; Market efficiency; Market anomalies;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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