TY - JOUR AU1 - BONDT, WERNER F. M. AU2 - THALER, RICHARD AB - ABSTRACT Research in experimental psychology suggests that, in violation of Bayes' rule, most people tend to “overreact” to unexpected and dramatic news events. This study of market efficiency investigates whether such behavior affects stock prices. The empirical evidence, based on CRSP monthly return data, is consistent with the overreaction hypothesis. Substantial weak form market inefficiencies are discovered. The results also shed new light on the January returns earned by prior “winners” and “losers.” Portfolios of losers experience exceptionally large January returns as late as five years after portfolio formation. TI - Does the Stock Market Overreact? JF - The Journal of Finance DO - 10.1111/j.1540-6261.1985.tb05004.x DA - 1985-07-01 UR - https://www.deepdyve.com/lp/wiley/does-the-stock-market-overreact-ysxFHVV90k SP - 793 VL - 40 IS - 3 DP - DeepDyve ER -