Post-earnings-announcement-drift and 52-week high: Evidence from Korea

Goh, Jihoon; Jeon, Byounghyun

doi:10.1016/j.pacfin.2017.06.008

Cited by 12 publications

(4 citation statements)

References 23 publications

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“…We believe that such a PTH anchoring influence on reversals fits with direct evidence in the literature about under‐ and overreactions of stock prices to “standardized unexpected earnings” (SUE) announcements (Birru, 2015; Goh & Jeon, 2017). We later discuss this evidence after establishing our main results, along with additional supportive SUE analysis.…”

Section: Introductionsupporting

confidence: 80%

“…Taken together, these results from Birru's (2015) two empirical exercises support the view of an overreaction to good news for low-PTH stocks. Goh and Jeon (2017) present evidence consistent with Birru (2015) for the Korean stock market. They find that the post-earnings announcement drift behavior depends heavily on a stock's 52-week PTH.…”

Section: 21supporting

confidence: 74%

“…Our short‐run reversal results are consistent with anchoring pricing influences suggested in the literature. Evidence in Birru (2015), Birru and Wang (2016), George and Hwang (2004), Li and Yu (2012), and Goh and Jeon (2017) all suggest agent's valuations can importantly depend on a price anchor or reference point. Investors’ valuations are more likely to be pessimistic (optimistic) for relatively higher priced (lower priced) stocks, such as those that are near to (far from) a 52‐week high.…”

Section: Discussionmentioning

confidence: 99%

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Price anchors and short‐term reversals

Zhu

Sun

Stivers

2020

Financial Management

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We find that price anchors have a role in understanding short-run reversals in 1-month (1 M) stock returns in conjunction with the well-known liquidity provision channel.Specifically, we determine that 1 M reversal strategies perform much better for stocks that have (a) a low price relative to their 52-week high (George and Hwang) and (b) a low capital gains overhang (Grinblatt and Han). Further, we uncover striking asymmetries in the reversal behavior between past winners and past losers depending upon the stock's price relative to the price reference points. These reversal asymmetries fit with the hypothesized price anchoring biases.

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Section: Introductionsupporting

confidence: 80%

Section: 21supporting

confidence: 74%

Section: Discussionmentioning

confidence: 99%

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Price anchors and short‐term reversals

Zhu

Sun

Stivers

2020

Financial Management

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“…Post-earnings drift affects several countries, including South Korea. Related researchers employ anchoring bias to explain PEAD in the Korean market [19]. Investors' perceptions of earnings news are influenced by whether stocks are at 52-week highs, therefore good earnings news will be disregarded if prices are near peaks.…”

Section: The Role Of Foreign Investors In Stock Market Anchoring Tend...mentioning

confidence: 99%

Anchoring Effect Affect the Decision Making on Stock Market

Guo¹,

Wang²,

Xue³

2022

Advances in Economics, Business and Management Research

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Although market fluctuations may aid investors in making better trading decisions, psychological variables such as the anchoring effect can also have an impact. The anchoring effect is one of the most effective cognitive heuristics. The impact of the anchoring effect on investor performance and capabilities is studied in behavioural finance, which is important since it discloses the root causes of market insufficiency. Many types of anchors, investors, and the frequency with which these factors arise all affect investment decisions. The fundamental purpose of this study is to see how these characteristics influence stock market decision-making. The stock market and the anchoring effect can be combined. It has the capacity to successfully combine the anchoring effect with the stock market. The researchers discovered that all factors might have a significant impact on decision-making.

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