Why do stock markets overreact to past performance?
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Over the past few decades, Efficient Market Hypothesis (EMH) has been one of the ... the stock returns are predictable and that the contrarian stock selection ... Overreaction hypothesis asserts that stock markets are subject to the waves of.
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This paper investigates the evidence on the stock market overreaction hypothesis (ORH), which holds that, if stock prices systematically overshoot as a consequence of excessive investor optimism or pessimism, price reversals should be predictable from past price performance.
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