AGGREGATE EARNINGS AND RETURNS IN BRAZIL

We used the method employed in Kothari, Lewellen and Warner (2006) to show the relationship between aggregate earnings and market returns in Brazil in the period from 1995 to 2017. Considering the findings found by Kothari, Lewellen and Warnet (2006), our results indicate that the theory of Bernard and Thomas (1990) is more consistent with the US market than with the Brazilian market, signaling that the aggregate post-earnings announcement drift tends to be larger in markets with higher earnings persistence, like Brazil. Our findings also indicate that the relationship between aggregate returns and earnings in Brazil tends to be positive for the current period and the next two quarters, corroborating the Sadka and Sadka (2009) study. Considering that the predictability of earnings in the US market is higher than that in Brazil, our results also support the argument by He and Hu (2014) that the relationship between aggregate earnings and returns is linked to each country’s level of disclosure. However, new evidences reveal the influence of high interest rates on financial market results, suggesting that expectations of increased interest rates tend to reduce aggregate current returns in Brazil due to the possible migration of capital to lower risk, given the attractiveness of their returns in an environment of high inflation.

Modelling Nigerian Exchange Rates with Asymmetric GARCH Models

This work consider the estimation of some naira exchange rate returns by volatility models which include the asymmetric variants, with estimation performed under normally distributed assumption of Generalized Autoregressive Conditional Heteroscedastic (GARCH). The symmetric versions are Riskmetrics, ARCH and GARCH models. Initially, first order serial correlation was observed in the returns series, implying the dependencies of current returns on the immediate past. Of the asymmetric volatility models, the Exponential GARCH (EGARCH) and Asymmetric Power ARCH (APARCH) posed to perform better than the other symmetric forms in the predicting the volatility of naira exchange returns.

Can Investing Diaries be Hazardous to Your Financial Health?

Business writers and academics have suggested keeping an investing diary to avoid hindsight bias. In the diary, investors justify their predictions of future events, e.g., “This stock will go up because…” Eliminating hindsight bias should improve future returns. However, psychological research on the “explanation effect” suggests that justifying one’s predictions in writing induces overconfidence and, by consequence, reduces current returns. We test these propositions in a set of prediction markets populated by two types of traders: forecasters who completed a required investing diary task and non-forecasters who did not. The portfolios of forecasters were significantly over-invested in securities associated with the forecaster’s prediction. This is consistent with prior psychological research and a clear sign of investor over-confidence. We further find that forecasters with accurate predictions have higher returns than those with inaccurate predictions. However, the returns for forecasters with inaccurate predictions were generally no worse than the returns of the non-forecasters. Our results suggest that while keeping an investing diary may lead to biased portfolios, it does not have an overall negative effect on current returns. Therefore, contrary to expectations, there is not a trade-off between the long-term and short-term effects of an investing diary.

Modelling Nigerian Exchange Rates with Asymmetric GARCH Models

This work consider the estimation of some naira exchange rate returns by volatility models which include the asymmetric variants, with estimation performed under normally distributed assumption of Generalized Autoregressive Conditional Heteroscedastic (GARCH). The symmetric versions are Riskmetrics, ARCH and GARCH models. Initially, first order serial correlation was observed in the returns series, implying the dependencies of current returns on the immediate past. Of the asymmetric volatility models, the Exponential GARCH (EGARCH) and Asymmetric Power ARCH (APARCH) posed to perform better than the other symmetric forms in the predicting the volatility of naira exchange returns.

INFORMATION CONTENT OF PRO FORMA EARNINGS

An increasing number of firms release “pro forma” earnings along with net income in their financial reports in the press. The pro forma earnings are defined by individual firms which are different from the net income defined under Generally Accepted Accounting Principles (GAAP). Lougee and Marquardt (2004) indicated that companies with less informative GAAP earnings were more likely to engage in reporting pro forma earnings than others. This study examines whether the pro forma earnings provide information to investors about future earnings in the Taiwanese stocks market. A condition of information asymmetry exists between investors and managers, and pro forma earnings are a way to disclose the latter’s ideas about their firms’ future profitability to investors. The quality of the financial information that is provided will impact investors’ predictions about firms’ future earnings, and so affect stock prices. The purpose of this study is thus to investigate the information content of pro forma earnings, and examine whether pro forma earnings can provide details of future earnings to the investors in the Taiwanese stock market. We collect 3,287 firm-year observations listed on the Taiwan Stock Exchange or Gre Tai Securities Market from 2008 to 2012, and our data is from the Taiwan Economic Journal (TEJ) database. Our results show that the disclosure of pro forma earnings can improve the association between current returns and future earnings. This implies that the disclosure of pro forma earnings reveals credible information, which is then incorporated into current returns.

Generation of a large cross-section electron beam in the vacuum diode with rod current returns

The results of the experimental studies of the high-power e-beam accelerator producing six radially convergent electron beams are presented. The studies are aimed to increase the energy of the electron beam transported through the foil into the gas-filled chamber by using the rod-shaped current returns in the diode at small inter-electrode gaps. Installation of these rod current returns shields the periphery regions of the diode from the current field in the central part thus reducing the field at the diode edge. The inter-electrode distance, the shape, and the sizes of the cathodes are chosen by taking into account the magnetic field reduction in the diode. It is shown that in such type of the diode the electrons impact the foil almost normally to its surface, and the electron beams enter the output windows completely. Such type of the diode allows increasing the efficiency of the electron beam energy transfer into the gas by 30%.