The Cross-Section of Non-Professional Analyst Skill

We examine the cross-section of skill among non-professional analysts (NPAs) on Seeking Alpha, a prominent crowd-sourced investment research platform. We estimate that 60% of NPAs are skilled, and we document substantial dispersion in skill. Even after accounting for bid-ask spreads and allowing for a three-day investment delay, following NPAs in the top quintile of past skill earns annualized abnormal returns of 10%. In contrast, an unconditional strategy that follows all NPAs earns insignificant returns. An examination of retail and institutional order imbalances following NPA recommendations suggests that neither group recognizes the size-able differences in ability across NPAs

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Year of publication:	2020
Authors:	Farrell, Michael
Other Persons:	Jame, Russell (contributor) ; Qiu, Tian (contributor)
Publisher:	[2020]: [S.l.] : SSRN
Subject:	Finanzanalyse \| Financial analysis \| Qualifikation \| Occupational qualification

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