Talking Numbers: Technical versus Fundamental Investment Recommendations
43 Pages Posted: 22 Aug 2015 Last revised: 8 Jun 2018
Date Written: 2018
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.
Keywords: fundamental analysis; technical rules; market efficiency; market anomalies
JEL Classification: G10, G14, G24
Suggested Citation: Suggested Citation