Michael Clement
Professor, Department of Accounting | The University of Texas at Austin, McCombs School of Business
Austin, TX, UNITED STATES
Capital markets expert and former VP, Goldman Sachs and Citicorp
Areas of Expertise (5)
Financial Reporting
Security Market Valuation
Earnings Forecasts
Financial Accounting
Financial Analysts
Biography
Michael Clement is a professor in the Department of Accounting at the McCombs School of Business and is the KPMG Centennial Professor of Accounting. Dr. Clement is a CPA with extensive industry experience in global investments, capital planning and auditing. His research and teaching interests focus on financial analysts' earnings forecasts and management disclosures.
Media
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Education (3)
Stanford University: Ph.D., Accounting 1997
University of Chicago: M.B.A., Finance 1988
Baruch College: B.B.A. (Magna Cum Laude), Accounting 1980
Media Appearances (6)
PhD Project Inducts Accounting Professor Dr. Michael B. Clement into 2015 Hall of Fame
The University of Texas at Austin online
2015-08-31
Dr. Michael B. Clement, professor of accounting at UT Austin, has been inducted into the PhD Project’s 2015 Hall of Fame. The PhD Project, a program that works toward increasing the diversity of business school faculty, established the Hall of Fame in 2011 to recognize a select few who have inspired many
The bad news on Apple’s stock is only beginning
MarketWatch online
2015-08-05
As a result, according to Michael Clement, an accounting professor at the University of Texas in Austin, the market tends to react more quickly to bad news than do the analysts themselves. Thus, analysts more often than not follow the market rather than lead it.
Inside the Black Box of Analyst Decision-Making
IR Magazine online
2014-10-26
"A pair of large-scale surveys of buy-side and sell-side analysts has uncovered an array of valuable and perhaps surprising insights into the different inputs and incentives that shape their respective research."
Stock Analysts Tell All!
Wall Street Journal online
2013-04-25
"Consider a new study of stock analysts by a team of accounting and finance professors: The analysts rank private phone calls with management as the most useful source of information for generating earnings forecasts. And promoting private access to corporate management remains one of the best ways for an analyst to get a rise out of clients... Any investor – especially any individual investor – still clinging to the delusion that Wall Street analysts provide an independent, objective and skeptical perspective on companies needs to read this study."
Wall Street Analysts: Accuracy Is the Least of Their Concerns
Fortune online
2013-04-30
FORTUNE — "As someone who has been tracking the forecasts of Apple AAPL -0.67% analysts for nearly five years, I was not entirely surprised to learn that when 365 sell-side analysts (not just covering Apple) were asked what factors affected their compensation, the accuracy and timeliness of their earnings forecasts came in dead last."
The Quarterly Earnings Game Is Far Crazier Than You Could Ever Imagine
Lincoln Journal Star online
2017-05-25
We now know a lot more about the sophisticated ways companies tell their stories thanks to a new research paper called "Managing the Narrative". The survey, conducted by Lawrence Brown of Temple University, Andrew Call of Arizona State University, Michael Clement of the University of Texas at Austin, and Nathan Sharp of Texas A&M University, may be the first of its kind to study the people most responsible for managing corporate narratives: investment-relations officers (IROs).
Articles (6)
The Activities of Buy-Side Analysts and the Determinants of their Stock Recommendations
Journal of Accounting and Economics
2016-08-01
We survey 344 buy-side analysts from 181 investment firms and conduct 16 detailed follow-up interviews to gain insights into the activities of buy-side analysts, including the determinants of their compensation, the inputs to their stock recommendations, their beliefs about financial reporting quality, and the role of sell-side analysts in buy-side research. One important finding is that 10-K or 10-Q reports are more useful than quarterly conference calls and management earnings guidance for determining buy-side analysts׳ stock recommendations.
Inside the "Black Box" of Sell-Side Financial Analysts
Journal of Accounting Research
2015-03-01
"Our objective is to penetrate the 'black box' of sell-side financial analysts by providing new insights into the inputs analysts use and the incentives they face... One important finding is that private communication with management is a more useful input to analysts’ earnings forecasts and stock recommendations than their own primary research, recent earnings performance, and recent 10-K and 10-Q reports."
Understanding Analysts' Use and Under-use of Stock Returns and Other Analysts' Forecasts when Forecasting Earnings
Journal of Accounting and Economics
2011-01-01
"In this study, we examine how analysts are affected by the public actions of investors and other analysts by closely examining how analysts revise their earnings forecasts after an earnings announcement. In particular, we hypothesize that analysts observe the actions of investors and other analysts in order to more accurately forecast earnings and have the expertise to determine when these actions are most informative about future earnings."
Sociopolitical Dynamics in Relations Between Top Managers and Security Analysts: Favor Rendering, Reciprocity, and Analyst Stock Recommendations
Academy of Management Journal
2008-10-01
"We examine how the disclosure of negative firm information may prompt top executives to render personal and professional favors for security analysts, who may reciprocate by rating firms relatively positively."
Financial Analyst Characteristics and Herding Behavior in Forecasting
The Journal of Finance
2005-02-01
This study classifies analysts' earnings forecasts as herding or bold and finds that boldness likelihood increases with the analyst's prior accuracy, brokerage size, and experience and declines with the number of industries the analyst follows.
Do Investors Respond to Analysts' Forecast Revisions as if Forecast Accuracy Is all that Matters?
The Accounting Review
2003-01-01
"Prior research suggests that investors' response to analyst forecast revisions increases with the analyst's forecast accuracy. We extend this research by examining whether investors appear to extract all of the information that analyst characteristics provide about forecast accuracy. We find that only some of the analyst characteristics that are associated with future forecast accuracy are also associated with return responses to forecast revisions."
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