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Overreaction or Fundamentals: Some Lessons from Insiders' Response to the Market Crash of 1987

Overreaction or Fundamentals: Some Lessons from Insiders' Response to the Market Crash of 1987 ABSTRACT This paper shows that i) the Crash was a surprise to corporate insiders; ii) insiders became buyers of stock in record numbers immediately following the Crash; iii) stocks that declined more during the Crash were also purchased more by insiders; and iv) stocks that were purchased more extensively by insiders during October 1987 showed larger positive returns in 1988. The overall evidence suggests that overreaction was an important part of the Crash. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Finance Wiley

Overreaction or Fundamentals: Some Lessons from Insiders' Response to the Market Crash of 1987

The Journal of Finance , Volume 45 (5) – Dec 1, 1990

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References (19)

Publisher
Wiley
Copyright
1990 The American Finance Association
ISSN
0022-1082
eISSN
1540-6261
DOI
10.1111/j.1540-6261.1990.tb03719.x
Publisher site
See Article on Publisher Site

Abstract

ABSTRACT This paper shows that i) the Crash was a surprise to corporate insiders; ii) insiders became buyers of stock in record numbers immediately following the Crash; iii) stocks that declined more during the Crash were also purchased more by insiders; and iv) stocks that were purchased more extensively by insiders during October 1987 showed larger positive returns in 1988. The overall evidence suggests that overreaction was an important part of the Crash.

Journal

The Journal of FinanceWiley

Published: Dec 1, 1990

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