20 Analysts Are Two Times Better Than Five [CHART]

20 Analysts Are Two Times Better Than Five [CHART]

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Mohnish Pabrai On Value Investing, Missed Opportunities and Autobiographies

Mohnish PabraiIn August, Mohnish Pabrai took part in Brown University's Value Investing Speaker Series, answering a series of questions from students. Q3 2021 hedge fund letters, conferences and more One of the topics he covered was the issue of finding cheap equities, a process the value investor has plenty of experience with. Cheap Stocks In the Read More

  • According to vox populi (wisdom of crowds) theory, more guesses should make consensus estimates more accurate
  • With analysts forecast earnings, it holds true for up to 30 analysts as forecast error is reduced with increased analyst coverage
  • However, for companies with more than 30 analysts covering it, accuracy starts to deteriorate
  • This shows that more analyst estimates only improve consensus estimate accuracy to a point


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