Witness The Herding Behavior Of Wall Street's Analysts

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		Home Tech Finance Markets Politics Strategy Entertainment Advertising Retail Sports Life Friday, July 26, 2013 Witness The Herding Behavior Of Wall Street's Analysts One of the tasks of Wall Street's equity analysts is to forecast earnings, which is more or less the culmination of all of their research and expertise. And as this chart from Bank of America Merrill Lynch shows, analysts' earnings estimates are increasingly in line with each other. Some speculate that this is proof that they're herding. "The average estimate dispersion for S&P 500 companies currently sits at 10%, below the long-term average of 18%," writes BAML's Equity and Quant Strategy team led by Savita Subramanian. "This indicates that analysts remain clustered around consensus in EPS estimates, which we believe suggests a reluctance to diverge from the pack or rather than a strong conviction in earnings. Dispersion has remained in this narrow range of ~10- 15% since 2010." Read » Also On Markets Today: Citi's Morse: Oil Prices Have Peaked For The Year Next Week Is Going To Be Crazy Advertisement CHART OF THE DAY: China Is Literally Going Nuclear CHART OF THE DAY: One Mega Trend Has Been Behind Every Major Asian Economic Boom In The Past 50 Years CHART OF THE DAY: The Misery Index Is Bullish For Stocks Share this: Facebook Twitter Digg Reddit StumbleUpon LinkedIn The email address for your subscription is: ipat39@gmail.com Change Your Email Address | Unsubscribe | Subscribe | Subscribe to the Markets RSS Feed Business Insider. 257 Park Avenue South, New York, NY 10010 Terms of Service | Privacy Policy

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