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…
# Does the Stock Market Overreact?
> OpenAlex Metadata Hub · https://openalex.org/W2144487825
## Bibliographic
- **DOI:** 10.1111/j.1540-6261.1985.tb05004.x
- **Year:** 1985
- **Citations:** 7244
- **Open Access:** No (closed)
- **License:** —
- **Source:** https://doi.org/10.1111/j.1540-6261.1985.tb05004.x
## Authors
- Werner F. M. De Bondt
- Richard H. Thaler
## Abstract
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.
## Keywords
Economics, Portfolio, Stock (firearms), Financial economics, Market efficiency, Stock market, Efficient-market hypothesis, Monetary economics, Empirical evidence, Econometrics, Biology, Geography
## Concepts
- Economics
- Portfolio
- Stock (firearms)
- Financial economics
- Market efficiency
- Stock market
- Efficient-market hypothesis
- Monetary economics
- Empirical evidence
- Econometrics
- Biology
- Geography
- Paleontology
- Archaeology
- Horse
- Philosophy
- Epistemology
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*Metadata only — full text not imported unless Open Access license permits.*
Bài “Does the Stock Market Overreact?” được TradingBase chuyển thành Knowledge Product cho trader — không phải trang đọc abstract OpenAlex.
Tóm lược học thuật (đã diễn giải): 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.
Phần Trading Insights bên dưới nối nghiên cứu với Forex, vàng, USD, lãi suất và risk regime — để bạn đưa vào journal và playbook.
Metadata DOI/OA chỉ là rail tham chiếu; nội dung chính là summary, takeaways và ứng dụng thị trường do Content Factory sinh.
1. ABSTRACT Research in experimental psychology suggests that, in violation of Bayes' rule, most people tend to “overreact” to unexpected and dramatic news events.
2. This study of market efficiency investigates whether such behavior affects stock prices.
3. The empirical evidence, based on CRSP monthly return data, is consistent with the overreaction hypothesis.
4. Substantial weak form market inefficiencies are discovered.
5. 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.
Trader nên nối luận điểm policy/lãi suất trong tài liệu với bias trung hạn của USD và các cặp major — đặc biệt quanh FOMC / dữ liệu CPI.
Với XAUUSD: kỳ vọng cắt lãi / USD yếu thường hỗ trợ vàng; hawkish surprise thường gây áp lực giảm — dùng khung này để đọc reaction sau tin, không đoán trước.
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Góc Gold (XAUUSD): đối chiếu kết luận bài với hành giá gần nhất và lịch tin impact cao trước khi vào lệnh.
Trading: rút 1 bias hoặc 1 setup hypothesis từ Key Takeaways, test trên demo/journal trước khi live.
Risk: chuyển insight thành rule (max risk/trade, pause quanh tin, correlation USD–vàng) và gắn vào playbook.
