Hilary and Hsu have a cool paper that suggests not only do a few correct forecasts lead to overconfidence, but that investors (and analysts) can themselves predict this overconfidence.
We examine whether attribution bias that leads managers who have experienced short-term forecasting success to become overconfident in their ability to forecast future earnings. Importantly, this form of overconfidence is endogenous and dynamic. We also examine the effect of this cognitive bias on the managerial credibility. Consistent with the existence of dynamic overconfidence, managers who have predicted earnings accurately in the previous four quarters are less accurate in their subsequent earnings predictions. These managers also display greater divergence from the analyst consensus and are more precise. Lastly, investors and analysts react less strongly to forecasts issued by overconfident managers"
Note the last sentence which is VERY cool. Investors realize the increased likelihood of overconfident managers and react accordingly.
Cite: Hilary, Gilles and Hsu, Charles, Endogenous Overconfidence in Managerial Forecasts (March 18, 2011). INSEAD Working Paper No. 2011/39/AC. Available at SSRN: http://ssrn.com/abstract=1789664