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John A. Doukas of Virginia Beach, professor of finance and eminent scholar at Old Dominion University, has received the prestigious Graham and Dodd Award for Excellence for 2004 for an article published in the November-December 2004 issue of Financial Analysts Journal. The article, "Divergent Opinions and the Performance of Value Stocks," was co-authored with C. Kim and C. Pantzalis.

Doukas also is founding and managing editor of the European Financial Management journal.

The article describes how divergent opinions among investors can explain the "value" anomaly. It investigates whether investor disagreement, manifested in the dispersion of analysts' earnings forecasts, plays an important role in asset pricing. The findings of the article suggest that the return advantage of "value" strategies is a reward for the greater disagreement characterizing their future growth in earnings. Alternative multifactor asset pricing tests show that divergence of opinion among investors plays an important role in explaining the superior return of value stocks.

The Graham and Dodd Award, Financial Analysts Journal's highest honor, was established in 1960 to recognize excellence in research and financial writing. It was named in honor of Benjamin Graham and David L. Dodd, longtime contributors in the field of financial analysis. Recipients are chosen by readers and the journal's editorial board.

The 60-year-old Financial Analysts Journal is published six times a year by CFA Institute to advance the knowledge and understanding of investment management by publishing high-quality, practitioner-relevant research.

CFA Institute is headquartered in Charlottesville, Va., with additional offices in London and Hong Kong. CFA Institute is the global, nonprofit professional association that administers the CFA curriculum and examination program worldwide and, through its CFA Center for Financial Market Integrity, sets voluntary, ethics-based professional and performance-reporting standards for the investment industry. CFA Institute membership includes more than 70,000 financial securities analysts and investment managers in 119 countries.

This article was posted on: April 13, 2005

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