I investigate how career concerns influence banking analysts’ forecasts and find that banking analysts issue relatively more optimistic forecasts early in the year and more pessimistic forecasts later in the year for banks who could be their future employers. This pattern is not observed when the same analysts forecast earnings for banks with no equity research departments. Using the Global Settlement as an exogenous shock on career concerns, I show that this forecast pattern is pronounced after the Settlement. Moreover, I find that analysts benefit from this behaviour as analysts that are more biased in their forecasts towards potential future employers are more likely to move to a higher reputation bank. Textual analysis of analyst reports is also valuable due to the private information and analysis conveyed in the text. Second paper therefore examines analyst reports with consistent and conflicting signals in terms of qualitative and quantitative outputs. I find that investors react more strongly when the sentiment and earnings forecast bias are consistent. Interestingly, when the tone of report text does not coincide with the earnings forecast, investors place greater weight on the text rather than the EPS forecasts. I also find that consistent reports with both optimistic sentiment and forecast bias have a strong positive market reaction but they are low in forecast accuracy. Markedly, forecasts with pessimistic sentiment have higher accuracy than those of optimistic sentiment. Hence, pessimistic sentiment is a good indicator of the quality of forecast reports. Finally, in my last paper, I explore whether there is any association between firm-specific investor sentiment and the subsequent tone of firms' quarterly reports. Firm-specific investor sentiment is measured using the methodology from Aboody et al. (2016), which proxies for market confidence relating to a specific firm. Given the potential cost-benefit trade-off in the reporting strategy, I argue and find different responses from managers in their 10-Qs in terms of their investor sentiment. I focus on the tone of optimism, readability and the proportion of uncertain words in the 10-Q filings. For firms with extremely high levels of investor sentiment, managers tend to be more conservative by using less optimistic words to avoid future disappointment. In comparison, in firms with extremely pessimistic investor sentiment, managers tend to use more optimistic and easy to understand language, and minimize their proportion of uncertainty in their 10-Q filings. By doing so, perhaps they are trying to alter their investor sentiment.

This thesis analyzes the influence of publicized events on stock price of football teams. For this, event study method and regression model was used. Publicized events were significant win in competitions or corruption scandal in Italian football. This thesis found out, that some events influence investor behavior, for example corruption scandal in Italian football or FC Porto win in Champions league final. Efficient market hypothesis was not disprove. Furthermore, it was found that fans -- investors respond to the results of his team, especially surprising wins and goal difference. Higher volume of stocks is traded in the season than out of season.

This thesis is an attempt to advance our understanding of investor behaviour in one of the world’s largest markets, i.e. the mutual fund industry. It consists of three essays that answer the following questions: Does investor fund-selection ability explain the impressive growth of the U.K. mutual fund industry? Does the behaviour of U.S. mutual fund investors vary across the business cycle? And, how do investors react to U.S. mutual fund name changes? The first essay explores the role of investor fund-selection ability in explaining the growth of the mutual fund industry given that previous studies find that mutual funds underperform their benchmarks on average. I examine such ability in the context of the remarkable growth experienced by U.K. mutual funds during the decade of 2000-2010. Using three alternative measures of selection ability and two for performance measurement, I find that fund-selection ability is explained away by the momentum factor due to investors naively chasing recent winners. In addition, this essay is the first to examine the impact of fund visibility on selection ability. I find that fund visibility is an important factor in the investment decision-making process, and one that fund managers can potentially manipulate to their advantage. The second essay is motivated by recent findings that benchmark-adjusted returns to the fund industry are positive in periods of economic contractions. Previous literature is silent on investor behaviour in the face of superior average returns. This essay fills the gap in literature by examining investor’s fund-selection ability across the business cycle. I examine U.S. fund data from 1970-2011 and find that while genuine selection ability does not exist in any period, investors do behave differently across the business cycle. Specifically, investors no longer chase recent winners during contractions, despite no change in fund performance consistency. Instead, I find that investors are more concerned about controlling their risk exposure, especially to the market, during periods of economic downturn. The third essay examines investor reactions to U.S. mutual fund name changes, following the adoption of a new SEC ruling in 2001 to curtail misleading names. We uncover striking evidence that funds continue to undertake cosmetic name changes, and that such changes appear to mislead investors. I find that investors react more positively to cosmetic name changes than non-cosmetic ones. This result is not driven by marketing efforts. Instead, further examination reveals that this arises because cosmetic name changes frequently include industry ‘buzzwords’ in the new name, a tactic that is rewarded with higher flows to such funds. I also find that additional name changes by a fund continue to attract significant flows, although the magnitude of the flows decreases over each successive event. This essay provides compelling evidence in favour of investor irrationality and has implications for both practitioners and academics.

In the recent years, there has been growing talk of investing in commodities in the financial markets. In the past, the commodity markets served for purposes of the producers and the end-users of commodities. With gradual innovation of the financial markets in the 19th and 20th century the modern commodity markets evolved and became more standardized. This process was accompanied by the increasing interest of financial speculators. In contrast with the commercial participants, the goal of these new investors in the commodity markets is not to hedge against adverse changes in commodity prices but to profit on the price movements of commodities. The inflow of this group was intensified by the development of new financial instruments enabling these investors to enter the commodity markets. It is undisputable that speculators have positive effect on the markets, by providing liquidity and lowering transaction costs. What remains to be answered is the real effect which the speculators have on the commodity prices, and if their action does not create distortion in the commodity prices. The price development on the commodity markets during the recent financial crisis gives strong arguments in the hands of those accusing the speculators of the negative impact on the commodity prices, which sometimes lead to creation of price bubbles. The goal of this thesis will be the analysis of the effect of speculators on the commodity markets, and if this prejudice is justified.

The purpose of this diploma thesis is to comprehensively describe the legal regulation of alternative investment funds in the Czech Republic. The diploma thesis is divided into seven parts. The first part deals with the definition of alternative investment funds. The aim of this section is to explain the EU legislation (acceptance and implementation of AIFMD). This part is continuously followed by the second part, which covers the current legislation of the Czech Republic. A part of this section is also a detailed description of the material scope of the Act on Investment Companies and Investment Funds. The third part is devoted to selected legal forms of alternative investment funds according to ZISIF. These are primarily a unit trust, a trust fund, a limited partnership for investment certificates (SICAR) and a joint-stock company with variable capital. The fourth part contains the definition of individual entities ensuring selected activities of the fund. In this section, a description of the person of a manager, administrator, depositary or a main sponsor is available, including a list of binding rules concerning their activities. An integral part of these chapters is also the definition of the position of individual subjects in relation to each other, i.e. the scope of their rights and...

The thesis is focus on the public investment in village development. The theoretical part explains the concept of public investment, describes the sources of financing these investment and describes the methods which can be use for public investment evaluated. Then it discribe status and functioning of the municipality in the legal system, processes of budgeting and facility management. The practical part is already focused on the village Chyšky, which decided to invest to improve development. In the thesis are described two specific investment projects, determined their cash flows and evaluated using the eCBA program. The output of the thesis is to determine the project, which will be more advantageous for the municipality.

This diploma thesis deals with a security portfolio creation for a small Czech private investor. The portfolio is composed of shares from the SPAD system on Prague Stock Exchange with an expected investment horizon of four years. The most important used tool is the fundamental analysis.

Entrepreneurs perceive and manage risk differently than investors (Palich & Bagby, 1995). As a result, entrepreneurs may underestimate the extent to which their ventures are perceived to be risky by a potential investor. Consequently, the entrepreneur is left with making assumptions that could be detrimental in obtaining the necessary capital to launch and grow the business. The purpose of this study was to determine if there is a common set of perceived critical risk factors among a group of experienced investors that would cause them to reject a deal out of hand. The research methodology chosen for this study was the Delphi Technique, which consisted of three rounds of surveys with a group of 18 experienced Angel Investors and Venture Capitalists. The process identified 82 critical risk factors across 7 categories. Over half of these factors were rated between ‘Important’ and ‘Critically Important’ at a consensus rate of greater then 70%. Each participant reported an average of 11 critical risk factors, yet they rated more than 40 as ‘Important’ or ‘Critically Important’, suggesting there are conscious and subconscious factors involved in the decision process. Subjective factors such as relationship were rated with higher importance than more objective measurable factors such as revenue or market share. Venture Capitalists, as a group, had higher rates of consensus than the Angel Investors and there were distinct differences between each group regarding which factors are most important. The study is significant because it rated subjective based factors along with objective factors showing that investors tend to place more importance on trust and relationship building in the early stages of the investment process. The study also provided a framework for understanding the complexity of investment decision-making for the benefit of investors, entrepreneurs, and those who educate and mentor entrepreneurs. Finally, the study is significant for helping entrepreneurs understand the differences in perspective between Angel Investors and Venture Capitalists.

In the seven decades following the Investment Company Act of 1940 coming into force in the United States, the mutual fund industry has undergone dramatic changes including, some argue, a transition from stewardship to salesmanship with asset-gathering becoming the industry’s driving force. As fund managers incrementally assumed a more pronounced role in the investment fund industry, an emerging strand of finance literature focused on their characteristics and their potential impact on investment performance. While a large body of academic research concurs that fund managers cannot outperform systematically better than chance, there are also a significant number of studies that link the psychological characteristics of investors to their investment performance. Importantly, we know that fund managers, as a representative sample of professional investors, often have to operate under enormous anxiety and associated psychic pressures. In their effort to cope with these pressures and make sense of an immensely unpredictable and complex work environment, a wide range of psychic defences and behavioural biases may be triggered. The purpose of this research is to investigate, on the one hand, to what extent mutual fund managers are prone to overconfidence and associated behavioural biases such as self-serving attribution. On the other hand, the extent to which overconfidence, proxied by a wide range of variables including overoptimism, excessive certainty and excessive self-reference, may have any bearing on fund performance is of interest. The fundamental question is why, how, and through which mechanisms does overconfidence affect performance. The underlying research questions are motivated by three large areas of research: studies of mutual fund performance and persistence, studies of financial accounting narratives, and studies of professional investor psychology. I also explore how overconfidence is fundamentally generated and, in a sense, resorted to by fund managers as a defence mechanism against the psychic pressures of having to work in a highly intangible, complex and uncertain environment. Drawing on evidence from fund manager reports written for investors, I explain how they use the medium of narratives, and in particular stories, to make sense of what they do as fund managers and their added value for clients. I demonstrate how analysing fund manager commentaries, both through computer-assisted corpus-linguistic approaches and through the “close reading” method, sheds light on the link between fund manager psychology and investment performance. In particular, from the perspective of narrative analysis, I explain how fund managers write their reports in distinguishably different genres depending, among others, on their past performance record, fund size and investment style. In addition, I establish in a longitudinal study that the overall economic environment in which fund managers operate does influence the rhetoric of fund manager reports as well as the evidence for the Pollyanna hypothesis. My findings also suggest that excessive overconfidence is associated, to a large extent, with diminished future investment returns. While superior past returns are expected to increase fund manager confidence which, in turn, may introduce the overconfidence bias in the investment decision-making process and thus diminish returns (through inefficient stock selection, suboptimal market timing and other possible mechanisms), this is not a simple regression towards the mean. The asset pricing model employed in my empirical analysis, the Carhart four-factor model, controls for the effect of previous-year momentum, and my overconfidence measures are only slightly correlated with the momentum figures. Hence, one is led to the conclusion that the narrative-based variables used in this study indeed capture some aspect of the professional investor psychology, and are capable of enhancing the explanatory power of conventional asset-pricing models such as Carhart’s. In investigating the dynamic relationship between fund manager overconfidence and investment performance, the cross-sectional variations in my study demonstrate that superior past performance boosts overconfidence as measured by all proxies employed. In addition, there appears to be an inverted-U relationship between overconfidence and subsequent investment performance. In particular, a hedging strategy based on shorting funds with extremely overconfident managers and going long in funds with normally (over)confident managers, yields positive average returns. The impact of overconfidence on subsequent returns is robust across different investment styles, although it is stronger among growth-oriented funds. Incorporating average scores for fund manager overconfidence over longer periods yields similar results. In addition, fund manager duration appears to correlate with managerial overconfidence in the long term.

Standard setters recently proposed increasing audit disclosures and reporting. Two experiments examine the effects of auditor-provided disclosures on financial statement users’ perceptions of auditor independence, management credibility, reporting quality, materiality, and investment decisions. In the first experiment, I manipulate auditor agreement with management’s estimates and whether the estimates are incentive-consistent for management. I find that users view auditors as more (less) independent when they agree (disagree) with management, given an unqualified opinion. I also find that users are able to identify management bias using audit disclosures, and that the disclosures are value-relevant. In the second experiment, I provide users with either an explicit or implicit materiality disclosure and elicit users’ materiality judgments either before or after the disclosure. I find that users’ materiality judgments are closer to the auditor’s when elicited after an explicit materiality disclosure. Path analysis demonstrates that users’ materiality judgments affect subsequent investment and audit-related judgments but do not affect important decisions related to auditor liability and investment. The findings provide empirical support for the argument that additional audit disclosures would increase the transparency and value-relevance of the audit report.