We examine analysts' implied expected rates of return for recent IPO firms relative to more seasoned firms. We document that analysts have relatively more optimistic expectations about recent IPO firms relative to seasoned firms, and these optimistic expectations persist, on average, for four...

I examine the effect of arbitrage risk on the alignment between stock prices and accounting fundamentals, where arbitrage risk is measured as the lack of close substitutes that can be used as a hedge. I find evidence consistent with the disparity between value and price being positively...

Critics of short-selling argue that short-sellers amplify price declines by targeting firms with falling prices in an unwarranted manner. Contrary to this viewpoint, we find that increases in short-interest for firms following a price decline are associated with measures of overpricing based on...

I investigate the possibility that recent price movements include significantly larger speculative components than those observed historically, where speculation is defined as the component of price that does not co-move with fundamentals. Specifically, at the aggregate level, price and...

We examine whether differences in the accounting measurement of investment activities help explain the negative association between aggregate investments and future returns. We decompose aggregate investment activity into investments in tangible and intangible assets. We find that the previously...

We investigate the timeliness of fair value updates. We use a sample of firms required to disclose quarterly fair values for individual investments that use unobservable inputs and find evidence consistent with delayed updating and, on average, asymmetric incorporation of upward revaluations...

We investigate whether historical cost measurement of assets lowers the usefulness of DuPont analysis for investors. Because firms report assets at modified historical cost under US GAAP, accounting ratios can be biased upward when assets have appreciated. Thus, variation in asset turnover,...