Are there any experts who can reliably predict stock market returns? In their September 2025 paper entitled "Beliefs and Stock Market Fluctuations: New Evidence from the Past Seven Decades", David Thesmar and Emil Verner assemble and test a 69-year sample of expected stock earnings and returns from Value Line (about 1,500 firms per year). They first compute the expected return for each stock by combining long-term (three to five years) Value Line earnings expectations and price targets. They then aggregate these expectations to annual market-weighted time series. They then compare the predictive power of the Value Line series to those of survey-based expectations of finance professionals, professional forecasters and individuals from prior research. Using the specified Value Line inputs during 1956 through 2024 and expectations from various surveys, they find that:
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