Rewriting Analyst History

This paper on fudging analyst recommendations has been floating around for a while, but it’s being published and will get more attention now.

We document widespread changes to the historical I/B/E/S analyst stock recommendations database. Across seven I/B/E/S downloads, obtained between 2000 and 2007, we find that between 6,580 (1.6%) and 97,582 (21.7%) of matched observations are different from one download to the next. The changes include alterations of recommendations, additions and deletions of records, and removal of analyst names. These changes are nonrandom, clustering by analyst reputation, broker size and status, and recommendation boldness, and affect trading signal classifications and back-tests of three stylized facts: profitability of trading signals, profitability of consensus recommendation changes, and persistence in individual analyst stock-picking ability.


ALEXANDER JUNGQVIST, CHRISTOPHER MALLOY, and FELICIA MARSTON, “Rewriting History,” The Journal of Finance 64 (August 2009): 1935-1960.