Investor Sentiment and Management Earnings Forecast

The purpose of this study is to investigate the relation between investor’s sentiment and bias in management earnings forecast. To do this, three hypotheses are formulated. The sample consists of 165 firms listed in Tehran Stock Exchange during 2010-2010. The research method is the multivariate regression model using the panel data method. The results of research hypotheses show that investor sentiment has a negative and significant relationship with bias in the management earnings forecasts; In addition, according to the research results, managers' annual earnings forecasts are not more optimistic when investors are optimistic, nevertheless, it is optimistic when investors are pessimistic. However, there is no significant difference between investor sentiment and managers' predictions in firms with higher uncertainty