Talking Numbers: Technical versus Fundamental Recommendations

Abstract

There is an age-old debate between technicians and fundamental analysts, the leading schools of thought in investment management. We answer that debate via a comprehensive analysis of technical and fundamental investment recommendations broadcasted on the TV show “Talking Numbers.” In particular, we study 1,599 dual recommendations, where each recommendation features a fundamental and a technical forecast. The evidence shows that technicians possess superior skills in predicting individual stock returns up to a twelve-month horizon, while fundamental analysts exhibit weaker predictive ability. Beyond that, neither group is able to predict returns on market-wide indexes, equity sectors, bonds, or commodities.