Market lessons for the FM

Companies provide guidance to investors about what business conditions could look like in the year ahead. There are strong incentives to provide conservative guidance, because investor expectations tend to form around them. Shares rise when the company eventually beats guidance at the end of the year. And share prices fall when companies miss their guidance. Often, the fall is asymmetrically steeper than the rise, making conservative guidance a more attractive strategy for corporate managements.

Read Full Story>>