Penn State Looking For Volunteers

Attn: Equity Investors — Penn State Research Study

Penn State University has asked FSP to help them find volunteers who are equity investors. They are conducting an experiment aimed at a better understanding of differences between the way financial professionals use accounting information to judge the performances of common stocks and the way retail investors use this information to make their judgments. Any professional who recommends individual stocks to their clients are considered good candidates for the Penn State study. Persons interested in participating should contact Orie Barron at oeb1@psu.edu. Or they can call him at 814 883 6389 if they have any questions.

They believe the study may yield several interesting findings to the financial services sector such as:

• professional investors are better able to use accounting information to form judgments that are more precise than those rendered by non-professionals.
• there may be instances in which certain classes of non-professionals are better adapted to use a particular type of accounting information.
• information that financial services professionals could use for providing improved service to their clients to enhance interpretations of accounting data.
• how professionals can better understand heuristics non-professionals use in making their stock performance judgments. Such experience-based techniques for problem solving are revealed in the responses participants make when completing our research instrument. Such knowledge will enable professional investors to better speak the same language and be on the "same page" as their clients.

The study involves having subjects spend about an hour filling out an excel spread sheet that has them forecast price changes for various firms' stocks. Participants will be given various amounts of information about these firms, so we will not be making any comparisons across individuals in terms of forecast accuracy. It is very important for everyone involved in this study to know that their forecasts will remain completely confidential.

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