Investor Overreaction: Evidence That Its Basis Is Psychological

摘要: Probably no subject in recent financial literature has generated more controversy than whether investors behave rationally pricing stocks, or they overreact to market information, resulting prices being too high low. Although the efficient hypothesis states that, with minor exceptions, securities are priced, repeated evidence been presented of predictable over- and underreactions. This is based primarily on consistently higher returns for out-of-favor stocks below-average favored issues. The existence overreaction marketplace, if it can be proven, important both investment decision-making theory, acute cases major cause bubbles panics. We present by showing that fundamentals upon which depend demonstrate little movement face changes unfavored stocks. find explanation other...