Influential Article Review - Exploring the Relationships Between Business Performance, Long Term Profits, And Behavioral Finance

Abstract

This paper examines business and finance. We present insights from a highly influential paper. Here are the highlights from this paper: Market efficiency survives the challenge from the literature on long-term return anomalies. Consistent with the market efficiency hypothesis that the anomalies are chance results, apparent over- reaction to information is about as common as under-reaction, and post-event continuation of pre- event abnormal returns is about as frequent as post-event reversal. Most important, consistent with the market efficiency prediction that apparent anomalies can be due to methodology, most long-term return anomalies tend to disappear with reasonable changes in technique. For our overseas readers, we then present the insights from this paper in Spanish, French, Portuguese, and German.