Publication

Differences of Opinion in Financial Markets: The Implications for Asset Returns
VDM Verlag Dr. Müller, 2009

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How are asset prices determined when investors disagree about the firm valuation? Prof. Anna Scherbina shows that market prices end up being too high, reflecting the more optimistic views.

The reason is that, while optimistic investors can express their opinions freely by buying the shares of the firms they favor, pessimistic investors are often prevented from selling due to widespread short-sale constraints. Stock prices, initially too high, eventually correct down as more information comes out and forces optimists to revise their valuations downwards. Hence, measures that capture the level of investor disagreement, such as dispersion in analysts’ forecasts, also predict future underperformance.

Furthermore, she presents evidence that equity analysts are at least partly to blame for the initial mispricing, as they tend to withhold negative information from investors under pressure from firm management. Yet, it is possible to quantify the amount of withheld negative information from the statistical properties of analysts’ forecasts.

The bottom line is that investors should stay away from stocks that rank high on investor disagreement and measures of withheld negative information.

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News Release

UC Davis Graduate School of Management partners with Lawrence Livermore and Sandia National Labs to drive technologies from lab to market

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(Davis, Calif.) – With a joint goal of speeding the transfer of new technologies from the laboratory to the commercial marketplace, the UC Davis Graduate School of Management, Lawrence Livermore National Laboratory and Sandia National Laboratories have announced a new partnership for researchers to develop their entrepreneurial skills.

Spotlight Story

Vickie Sherman MBA 13 Finds Her Passion, Her Career—and Herself

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What opportunities, decisions, events have shaped your professional life?

My career path has been a climb across a jungle gym rather than a tangent up a corporate ladder. As a child, I used to thumb through the three-inch JCPenney catalogue, picking out the professional women who I would grow to be. I wanted to rule the world from a corner office in a suit and heels. I wanted to shed my humble origins and become Corporate Barbie.

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MBA Student Consultants Make an IMPACT
Projects Put Business Needs Front and Center

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Agilent Technologies’ Electronic Measurement Group is a $3.6 billion business that over the past decade has seen a dramatic shift in its customer base from U.S., and Western European customers to predominantly Asia-based customers. Today, the majority of the division’s revenues are generated outside of the U.S., with an increasing concentration in China.

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UC Davis Part-Time MBA in Top 8%, Full-Time MBA in Top 9%
U.S. News & World Report’s latest rankings: This marks the 19th consecutive year our MBA program has been ranked among the best in the nation.

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(Davis, CA) — The UC Davis Graduate School of Management’s full-time MBA program has been ranked among the top six percent of AACSB International-accredited programs nationwide, according to U.S. News & World Report’s latest graduate business school rankings released today.