| Summary: | 碩士 === 國立中央大學 === 企業管理學系 === 102 === We correlate analysts’ forecast errors with temporal variation in investor sentiment. By using the monthly survey of consumer confidence index conducted by the Research Center for Taiwan Development Economic as a proxy for investor sentiment . Follow the study of Baker and Wurgler (2006),we classify “uncertain” or “difficult-to-value” firms to five characteristics.The empirical results of this study show the following：(1) Analyst’s earnings forecast is significantly optimistic. (2) When sentiment is high , analysts’ forecasts earnings growth are relatively less
optimistic for all companies.(3)When sentiment is high, analysts’ forecasts earnings growth are relatively less optimistic for “unprofitable” or “no-dividends” firms. In sum, our findings indicate that are regarded as relatively sophisticate and rational investors investors in the capital markets.
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